If you invest $3800.00 at an interest rate of 2.90% per annum compounded bi-monthly, what will the total value of your investment be after 5 years?
To find the total value of the investment after 5 years, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Total value of the investment after a specified time period
P = Principal amount (initial investment)
r = Annual interest rate (expressed as a decimal)
n = Number of times the interest is compounded per year
t = Number of years
In this case, the principal amount (P) is $3800.00, the annual interest rate (r) is 2.90%, the interest is compounded bi-monthly, so the number of times compounded per year (n) is 12/2 = 6, and the time period (t) is 5 years.
Now, let's plug these values into the formula:
A = 3800(1 + 0.0290/6)^(6*5)
Simplifying further:
A = 3800(1 + 0.00483)^(30)
Calculating the value inside the parentheses:
A = 3800(1.00483)^(30)
Using a calculator:
A ≈ 3800(1.162170)
A ≈ 4414.24
Therefore, the total value of your investment after 5 years will be approximately $4414.24.