What is the future value of $4000 in a bank for 9 years at 6% compounded bimonthly
To calculate the future value of an investment with compound interest, you can use the formula:
FV = P * (1 + r/n)^(n*t)
Where:
FV = Future Value
P = Principal amount (the initial investment)
r = Annual interest rate (in decimal form)
n = Number of compounding periods per year
t = Number of years
In this case, the principal amount (P) is $4000, the annual interest rate (r) is 6% or 0.06, and the investment is compounded bimonthly, meaning there are 6 compounding periods in a year. Therefore, n = 6. The investment is for 9 years, so t = 9.
Plugging in these values into the formula, we get:
FV = 4000 * (1 + 0.06/6)^(6*9)
Now let's calculate it step by step.
Step 1: Calculate the interest rate per compounding period:
0.06 / 6 = 0.01
Step 2: Calculate the total number of compounding periods:
6 * 9 = 54
Step 3: Calculate the future value:
FV = 4000 * (1 + 0.01)^54
Now, you can use a calculator or spreadsheet to evaluate this expression.
The future value of $4000 in a bank for 9 years at 6% compounded bimonthly is the result you get from evaluating the above expression.