P 1 r yt ompounded semiannually A t rn 8 If 4500 is investe

P( 1 + r yt, ompounded semiannually, A (t) rn 8. If $4500 is invested at an interest rate of 2.5% per year, c find the value of the investment after six years.

Solution

P=4500, r=2.5%=2.5*(1_/100)=0.025

compounded semi annually => n=2

sixyears => t=6

value of investment ,A= 4500*(1+(0.025_/2))^2*6

value of investment ,A= 4500*(1+0.0125)¹²

value of investment ,A= 4500*(1.0125)¹²

value of investment ,A= 4500*1.161

value of investment ,A= 5223.4 dollars