?

[rachael724]

what formula should I use with this problem?

How much money will be in a bank account at the end of 8 years if $15,000 are initially invested at 7%, compounded semiannually? (Answer correct to the nearest whole dollar, please.)

 

[soroban]

Hello, rachael724!

What formula should I use with this problem?

The compound interest formula: .\(\displaystyle A\:=\(1\,+\,i)^n\)
where \(\displaystyle P\) = principal invested, \(\displaystyle i\) = interest rate <u>per</u> <u>period</u>, \(\displaystyle n\) = number of <u>periods</u>.

How much money will be in a bank account at the end of 8 years
if $15,000 is invested at 7%, compounded semiannually?
(Answer correct to the nearest whole dollar, please.)[/color]

Your problem has: \(\displaystyle P\) = 15000

The annual interest rate is 7%.

"Semiannual" means <u>two</u> period per year.

. . So the interest rate <u>per</u> <u>period</u> is: \(\displaystyle i\,=\,\frac{7\%}{2}\,=\,0.035\)

. . and the number of <u>periods</u> is: \(\displaystyle n\:=\:2\,\times\,8\,=\,16\)


So we have: . \(\displaystyle A\;=\;15000(1.035)^{16}\)

Crank that out on your calculator . . .