Posted by linda on .
Find the total investment and the interest earned when $2,500 is invested at 5% compounded semiannually for 3 years.
P = Po(1+r)^n.
Po = $2,500 = Initial investment.
r = (5%/2)/100% = 0.025 = Semi-APR expressed as a decimal.
n = 2Comp/yr * 3yrs = 6 Compounding periods.
Plug the above values into the given Eq and get:
P = $2899.23
I = P-Po