Question

Find the balance in the account:

$1,600 principle earning 7%, compounded semi-annually, after 33 years.

Answer 1

balance = 1,600 * (1.07)^(33)

That's it!

http://www.wolframalpha.com/input/?i=+1%2C600+*+%281.07%29%5E%2833%29

Answer 2

Or, with the semi-annual compounding:

\(1600\cdot\left(1+\dfrac{0.07}{2}\right)^{33*2}\)

Answer 3

That's so confusing.

Answer 4

Annual Compunding (1 per year) \(1600\cdot\left(1 + \dfrac{0.07}{1}\right)^{33\cdot 1}\)

Semi-Annual Compunding (2 per year) \(1600\cdot\left(1 + \dfrac{0.07}{2}\right)^{33\cdot 2}\)

Quarterly Compunding (4 per year) \(1600\cdot\left(1 + \dfrac{0.07}{4}\right)^{33\cdot 4}\)

Monthly Compunding (12 per year) \(1600\cdot\left(1 + \dfrac{0.07}{12}\right)^{33\cdot 12}\)

Weekly Compunding (52 per year) \(1600\cdot\left(1 + \dfrac{0.07}{52}\right)^{33\cdot 52}\)

Daily Compunding (365 per year) \(1600\cdot\left(1 + \dfrac{0.07}{365}\right)^{33\cdot 365}\)

It all relates quite nicely.

Answer 5

= 1600*(1.035)^66

Answer 6

@tkhunny is correct. I missed the semi-annual part of the problem