$1,600 principal earning 7%, compounded semi-annually, after 33 years. solve and explain

Question

campbell_st · Answer

the number of time periods needs to double... from 33 years to 66 half years... to match the compounding period. 

the formula is 

$$A = P(1 + \frac{r}{100})^n$$

P = principal, r = interest rate and n = number of time periods

the only pert I am unclear on is the interest rate.... is it 7% per annum or 7% per half year? 

the calculations are 

 HALF YEAR at 7% 

$$A = 1600(1+\frac{7}{100})^{66}$$  

HALF YEAR at 3.5%

you need to change the annual interest to half yearly  7/2 = 3.5 

$$A = 1600(1 + \frac{3.5}{100})^{66}$$

just calculate you answer