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

1 Answer
Nallasivam V
Jun 21, 2018

#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

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