need help!!!!?

Question

Find the future value.

$2619 invested for 7 years at 6% compounded semi-annually

Answer 1

Nature Nate's right...unless you're taking an accounting course.

Usually a "6% interest compounded semi-annually" means "3% increase every 6 months", as interest rates are normally stated annually.

So if you're in an accounting class, the answer may actually be:

$2619(1.03)^14 = $3961.47

Answer 2

At each cycle the amount increases by 0.06.
There are 14 cycles (2 x per year for 7 years).

the total after one cycle = $2619 + 2619 x(0.06)
or 2619 x (1 + 0.06)
or 2619 x 1.06

after 2 cycles = [ 2619 x 1.06] x 1.06
or 2619 x (1.06)^2

so after 14 cycles = 2619 x (1.06)^14 = $5921.31

Addendum: I stand corrected, Jim is right... make sure 6% compounded semi-annually means:
1. 6% annual rate compounded every 6 months
or
2. 6% per six months compounded every 6 months.
Why is it everyone types faster than I do? :)

Answer 3

2619 * 1.06^14 = $5921.31
the basic function is initial value times (1+rate)^times compounded

Answer 4

With an initial lump sum of $2619.00,
an interest rate of 6.00% ,
and an accrual term of 7 years,
a tax-free account would grow to
$3,961.47

or to $3,221.04 adjusted for inflation

Answer 5

$1099.98

You would multiply 2619(7)(0.06) to get the answer
The formula is I=PRT
I = interest (answer)
P = principal ($2619)
R = rate (6%)
T = time (7 years)

Answer 6

7 years=14 half years
6%/year=3%/(half year)

x=$2619(1.03)^14=$3961.47