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Math

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Find the total investment and the interest earned when $2,500 is invested at 5% compounded semiannually for 3 years.

  • Math - ,

    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

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