posted by shakera on .
P=2500, r=12%, t=20yrs, n=2
The question is about compound interest, not compounds.
n is presumably the number of interest payments per year.
If so, the balance at the end of 20 years is
P*(1 + r/n)^(n*t)
= 2500*(1.06)^40 = ?
Do the numbers. The principal will double about every 6 years, so there will be a lot more money in 20 years.
If you don't have a pocket calculator, type the experession