A 1600 principal earns 7% interest, compounded semi-annually twice per year. After 33 years, what is the balance in the account?

Question

retireed · Answer

Do you have a formula?

anonymous · Answer

No

retireed · Answer

Why not?  

Surely your teacher gave you some sort of lesson on this subject or at least gave you book or study notes.

anonymous · Answer

Maybe, I've looked over them but I'm not really understanding the whole thing

retireed · Answer

Okay fair enough.

     A is the amount you want to find

     P is the principal   P = 1600

     Semi-annually means 2 interest periods per year   n =2
     t is the number of years   t = 33
     N is the number of interest periods   N = t * n    N = 33 * 2    N = 66

     I is the interest percentage    I = 7%
     i is the interest rate for the interest period  i =  I/100/n    = 7%/100/2     i =0.035

retireed · Answer

Now I need to check the formula to make sure I have the right one.

     I think it is 

     A = P ( 1+ i)^N         Does this look familiar?

anonymous · Answer

Yes thank you