When Paulina turned 21 she made a 28342 at a 233 interest ra

When Paulina turned 21, she made a $28,342 at a 23.3% interest rate compounded semi-annually. How much will the investment be worth when she turns 68 years old?

Solution

The formula for the value of investment compounded semi-annually will be:

Total value of investment = P(1 + (r/2))^2x47

where P is the principal amount; 2 is the compounding periods in a year; r is the rate of interest and 47 is the number of years.

Therefore A = 28342(1 + (0.233/2))⁹⁴

This is equal to $893,615,863.94. Hence this will be the value of the investment when she turns 68 years old.