Suppose that 2000 is invested at a rate of 34 compounded sem

Suppose that $2000 is invested at a rate of 3.4%, compounded semiannually. Assuming that no withdrawals are made, find the total amount after 6 years. Do not round any intermediate computations, and round your answer to the nearest cent.

Solution

amount invested = $ 2000

rate = 3.4% compounded semiannually

time = 6 years

applying compound interest formula

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

n = 2 for semiannual compounding

plugging the values in the formula

A = 2000 ( 1+ .034 / 2) ^ 12

A = $ 2448.39