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In order to pay for college, the parents of a child invest 10,000 in a bond that pays 8% interest compounded semiannually. How much money will there be in 21 years? Round your answer to the nearest cent.

Solution

In order to pay for college, the parents of a child invest 10, 000 in a bond that pays 8% interest compounded semiannually. How much money will there be in 21 years? Round your answer to the nearest cent.

Solution

Amount : 51927.84

Solution steps

Translate the problem into an equation:

A = 10000 (1 + \frac{0.08}{2})^{2 \cdot 21}

10000 (1 + \frac{0.08}{2})^{2 \cdot 21} = 51927.83911 \dots

Round to the nearest hundredth:

51927.84

Amount : 51927.84

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