25000 at 7% compounded semi anually for 10 years.
3.5 % twice a year, 20 periods
1.035^20 = 1.9898
1.9898*25000 = $ 49,744.72
rough check is 7% for ten years compounded is about double your money
That by the way is NOT simple interest. It is compound interest.
To calculate the compound interest for an investment of $25,000 at an interest rate of 7% compounded semi-annually for 10 years, you can use the following formula:
A = P(1 + r/n)^(n*t)
Where:
A = the final amount
P = the initial principal (in this case, $25,000)
r = the annual interest rate (in decimal form, 7% = 0.07)
n = the number of times the interest is compounded per year (in this case, semi-annually means 2)
t = the number of years
Plugging in the values into the formula:
A = 25000(1 + 0.07/2)^(2*10)
Calculating the values inside the parentheses first:
A = 25000(1 + 0.035)^(20)
Evaluate the numbers inside the parentheses:
A = 25000(1.035)^(20)
Now, calculate the exponent:
A = 25000(1.80809293879)
Finally, multiply the principal by the calculated value:
A = $45,202.32
Therefore, the final amount after 10 years with an initial investment of $25,000 at an interest rate of 7% compounded semi-annually would be $45,202.32.