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If $975 is invested in an account that earns annual interest of 8.5%, compounded semi
If $975 is invested in an account that earns annual interest of 8.5%, compounded semiannually, what will the account balance be after 7 years? (Round your answer to the nearest cent.)
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Given an annual interest rate of 8.5%, that's equivalent to 4.25% being paid every 6 months (half the interest in half a year). Over 7 years there are 14 half-year periods. So use the formula for compount interest:
FV = PV(1+i)^n where PV = present value = $975, I = 0.0425, and n = 14. |
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