Question

Jason manually calculated the present value of $500,000 at 4 percent 20 years from now to be $226,445.21 when interest is compounded semiannually. If Jason used the notation in the formula below to arrive at his answer, what is the numerical value of "t" in his formula? A. 10 B. 20 C. 40 D. 120 E. 200

Answer 1

C. 40 is the answer

Explanation:

Since the compound interest is calculated semiannually which means twice a year, that means you multiply the number of years given which is 20 years by 2 to arrive at the numerical value of t which is 40.