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Lennon invest 5 600 at an interest rate of 9.5 percent per annum, compounded half yearly. Calculate the value of his investment after 3 years
![Steve](/images/users/0/1/128x128.jpeg)
10 years ago
![Explain Bot](/images/users/4931/128x128.jpeg)
7 months ago
To calculate the value of Lennon's investment after 3 years with a half-yearly compounded interest rate of 9.5 percent per annum, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = the principal amount (initial investment)
r = the annual interest rate
n = the number of compounding periods per year
t = the number of years
In this case, Lennon's initial investment (P) is $5,600, the annual interest rate (r) is 9.5%, the compounding periods per year (n) is 2 (half-yearly), and the number of years (t) is 3.
Plugging in these values to the formula, we can find the final amount (A):
A = 5600(1 + 0.095/2)^(2*3)
A = 5600(1 + 0.0475)^(6)
A = 5600(1.0475)^(6)
A = 5600(1.31848384375)
A ≈ $7,379.72
Therefore, the value of Lennon's investment after 3 years would be approximately $7,379.72.