Question

$618 for 51⁄2 years at 101⁄2% compoundedsemi-annually. Find the accumulated amount.

Answer 1

Given: Principal amount of P= $618 compounded semi-annually for

`\begin{gathered} t=5(1)/(2)\text{ years at} \\ r=10(1)/(2)\% \\ \end{gathered}`

Required: To find the accumulated amount.

Explanation: The amount after t years at a rate of r% compounded semi-annually is

`A=P(1+(r)/(2))^(2t)`

Here,

`\begin{gathered} r=10(1)/(2)\% \\ =0.105 \\ \\ t=5(1)/(2) \\ =(11)/(2)\text{ years} \\ P=618\text{ \$} \end{gathered}`

Putting these values gives

`A=618(1+(0.105)/(2))^(11)`

Solving this gives the value

`A=1085\text{ \$}`

Final Answer: The accumulated amount is $1085.