Suppose that 2000 is invested at a rate of 55 compounded sem

Suppose that $2000 is invested at a rate of 5.5%, compounded semiannually. Assuming that no withdrawals are made, find the total amount after 3 years. Do not round any intermediate computations, and round your answer to the nearest cent.

Solution

A=P(1+(r/n))^nt

A= amount after t years

P =amount invested =2000

r =rate of interest =5.5%=0.055

n = number of time compounded = 2(semi anually )

t = 3 years

A=2000(1+(0.055/2))^2*3

A=2000(1.0275)⁶

A=2353.54

amount after 3 years =2353.54 $