Find the amount that results from the investment.
-$\$ 1,000$ invested at $4 \%$ compounded semiannually after a period of 6 years
A) $\$ 268.24$
B) $\$ 1,243.37$
C) $\$ 1,268.24$
D) $\$ 1,265.32$

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P(1 + \frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), $n$ is the number of times that interest is compounded per year, and $t$ is the time the money is invested for in years. For this problem, $P = \$1,000$, $r = 4\% = 0.04$, $n = 2$ (since the interest is compounded semiannually), and $t = 6$ years. Plugging these values into the formula gives $A = 1000(1 + \frac{0.04}{2})^{2*6} = \$1,268.24$.

Find the Amount That Results from the Investment $1,000\$ 1,000$1,000 Invested At

Find the Amount That Results from the Investment $\$ 1,000$ Invested At