00:01
Here we have an investment of $3 ,500 that's invested at 7 % compounded semi -annually, and we want to know how much it's worth in 18 years.
00:10
Well, i'm going to use the equation that a, which is how much it's worth in the future, will always be equal to p, which is how much you start with, times 1 plus r, which is the interest rate, divided by n, which is the number of times compounded per period, to the n, same n, times t, which is the time, number of periods.
00:32
So here we're assuming the period is a year, so it's asking how much we have after 18 years.
00:36
So it's asking for a.
00:38
Well, it's going to be p, so that's $3 ,500, the initial amount, times 1 plus r, we're told that 7%, which is 0 .07, divided by n.
00:48
This is semi -annually, meaning twice per year...