No, compounded Semiannually. You have 36 terms, at an interest rate of 4 percent
20000(1+.04)^36
A child invest $20,000 n a bond that pays 8% interest rate compounded semi-annually. How much money will there be in 18 yrs.
(20000*(1+(0.082))^(2*18)=82078.65
Is this correct
3 answers
I am confused where did the 36 terms come in at? and the 4% when the rate is 8%
(20000*(1+(0.08/2))^(2*18)
(20000*(1+(0.08/2))^(2*18)
8% per annum compounded semi-annually
---> 4% every half year
so i = .04
number of half-years in 18 years = 36
amount = 20,000( 1.04^36), as Bob had
= $82,078.65
---> 4% every half year
so i = .04
number of half-years in 18 years = 36
amount = 20,000( 1.04^36), as Bob had
= $82,078.65
0 answers