Problema Solution
a principal of 14,000 is invested in an account paying an annual interest rate of 6%. find the amount in the account after 15 years if the account is compounded semiannually.
Answer provided by our tutors
let
P = $14,000 the principal
r = 0.06 or 6% annual interest rate
t = 15 years
n = 2*t = 2*15 = 30 compounding periods (the account is compounded semiannually)
A = future value
A = P(1 + r/2)^n
A = 14000(1 + 0.06/2)^30
A = $33,981.67
there will be $33,981.67 in the account after 15 years.