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 + 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% or 0.04, n = 2 (since the interest is compounded semiannually), and t = 6 years. Plugging these values into the formula gives A = 1000(1 + 0.04/2)^(2*6) = $1,268.24.

Find the Amount That Results from the Investment