How much is 4000 worth after 20 Semi-Annuallys using an annual interest rate of 2.50% compounded Semi-Annually?

<-- Start Balance
<-- # of periods
<-- Interest rate
              

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How much is 4000 worth after
20 semi-annual periods
using an annual interest rate of 2.50%
compounded semi-annual?

Calculate effective interest rate

There are 2 semi-annual periods in a year
Convert interest rate to semi-annual

Semi-Annually Interest  =	Annual Interest Rate
	Compounding Periods

Semi-Annually Interest  =	0.025
	2

Semi-Annually Interest = 0.0125

Calculate Accumulated Balance

A = B(1 + i)ⁿ
where A = accumulated balance
B = opening balance
i = Semi-Annually interest rate
and n = number of periods

Plugging in our values

A = 4000(1 + 0.0125)²⁰
A = 4000(1.0125)²⁰
A = 4000(1.2820372317086)
A = 5,128.15

How much interest was earned?

Interest Earned = Accum. Value - Start Balance

Plug in our values

Interest Earned = 5,128.15 - 4,000.00
Interest Earned = 1,128.15

See Answer

A = 5,128.15
Interest Earned = 1,128.15

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Compound Interest Accumulated Balance Calculator Video

Tags:

• compound interest accumulated balance
• compound interest
• interest rate
• principal
• yield

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