You have a bank deposit now worth $5 000. How long will it take your deposit to be worth more than $8 000 if:

a) The account pays 5% actual interest every half year, and is compounded every half year?

b) The account pays 5% nominal interest, compounded semiannually?

Question

You have a bank deposit now worth $5 000. How long will it take your deposit to be worth more than $8 000 if:

a) The account pays 5% actual interest every half year, and is compounded every half year?

b) The account pays 5% nominal interest, compounded semiannually?

anonymous · Answer

Okay. I was just confused by the wording. When it says 'actual interest is earned every half year' that actually doesn't change the way you answer it.

perl · Answer

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