Question

You invest $2500 into an account that pays 6% interest compounded bi-monthly. How much money will be your account after 4 years?

Answer 1

`A = P(1+r/n)^(nt)`

A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit
r = the annual interest rate (decimal) `(6/100=(0.06))`
n = the number of times that interest is compounded per month (2)
[In a year interest is compounded 24]
t = the number of years the money is invested(4)

`A=2500(1+0.6/24)^(4 xx 24)`

`A=2500(1.025)^96=2500(10.7)=26,750`

Money in the account after 4 years = 26,750