rigoberto invests $8,000 at 6% interest comp semiannually for 1 year. Use the compound interest formula
To calculate the compound interest for Rigoberto's investment, we can use the compound interest formula:
A = P(1 + (r/n))^(nt)
Where:
A = the future value of the investment
P = the principal amount (initial investment)
r = the annual interest rate (expressed as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case, Rigoberto invests $8,000 at 6% interest, compounded semiannually for 1 year. Let's calculate the compound interest:
P = $8,000
r = 6%, or 0.06 as a decimal
n = 2 (since interest is compounded semiannually)
t = 1 year
Using these values, we can substitute them into the formula:
A = 8000(1 + (0.06/2))^(2*1)
Simplifying the equation:
A = 8000(1 + 0.03)^2
A = 8000 * 1.03^2
A = 8000 * 1.0609
A ≈ $8487.20
Therefore, the future value of Rigoberto's investment after 1 year with a 6% interest rate compounded semiannually would be approximately $8487.20.