At the age of 50 Sally invested $60,000 at 7% interest compounded semiannually. How much will she have at age 50
(60,000*(1+(0.07/2))^2-1)
Please proofread and post your correction.
Sally is 25 years old and plans to retire at the age of 50. She invested an inheritance of $60,000 at a 7% interest compounded semiannually. How much will she have at age 50?
(60,000*(1+(0.07/2))^2-1)=
Your formula is a creative variation of the real one
amount = 60000( (1 + .07/2)^50 - 1)/(.07/2)
= 60000( 1.035^50 - 1)/.035
=
To get the answer to this question, we need to apply the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A is the final amount
P is the principal amount (the initial investment)
r is the annual interest rate (in decimal form)
n is the number of times interest is compounded per year
t is the number of years
In this case, Sally invested $60,000 with an annual interest rate of 7%, compounded semiannually, for a total of 50 years. Let's calculate the final amount:
P = $60,000
r = 7% = 0.07
n = 2 (compounded semiannually)
t = 50
A = 60,000 * (1 + (0.07/2))^(2*50)
Now let's simplify the calculation step by step:
First, we divide the annual interest rate by the number of compounding periods per year: 0.07/2 = 0.035
Next, we multiply the number of compounding periods per year by the number of years: 2 * 50 = 100
Now, we calculate:
A = 60,000 * (1 + 0.035)^100
Now, you can use a calculator or a computer program to compute the final answer.