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math/algebra

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Compounded semiannually. P dollars is invested at annual
interest rate r for 1 year. If the interest is compounded
semiannually, then the polynomial P(1+r/2)^2represents the
value of the investment after 1 year. Rewrite this expression
without parentheses. Evaluate the polynomial if

P =$200 and r =10%.

  • math/algebra - ,

    it is totally impractival to write P(1+r/n)^n without brackets, unless n=2
    that would be P(1 + r + r^2/4)
    = P + Pr + Pr^2/4

    amount = 200(1.05)^2
    = 220.50

    notice in the expanded version
    amount = 200 + 200(.10) + 200(.10)^2/4
    = 200 + 20 + 0.5
    = 220.50

    mmmh, compare the two calculations.

  • algebra - ,

    7300@7% COMPOUNDED SEMIANNUALLY FOR 3 YRS

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