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2 December, 18:12

Semiannual compounding implies that interest is compounded times per year. You have deposited $96,780 into an account that will earn an interest rate of 9% compounded semiannually. How much will you have in this account at the end of four years?

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  1. 2 December, 21:11
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    Final Value = $137,630.90

    Explanation:

    Giving the following information:

    You have deposited $96,780 into an account that will earn an interest rate of 9% compounded semiannually.

    n = 4*2 = 8

    To calculate the final value we need to use the following formula:

    FV = PV * (1+i) ^n

    PV = 96,780

    i = 0.09/2 = 0.045

    n=8

    FV = 96,780 * (1.045) ^8 = $137,630.90
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