00:01
Okay, this problem says, tim has been saving for a down payment on a car.
00:06
He invested $4 ,000 in an account earning 2 .5 % interest compounded semi -annually.
00:14
After seven years, he is ready to buy his new car.
00:17
How much does he have in his account? okay, the formula for compound interest is the accumulated amount, that's a, equals principal, which is what you start with, open parentheses, one plus r, which is your interest rate as a decimal, over n, and that's the number of times per year that your interest will be calculated, carried to the nt power.
00:50
Okay, so, we're going to put those numbers in.
00:55
4 ,000 is p, one plus r is .025, you always move your decimal to the left two places, over two, because it says semi -annually, and that's twice a year, to the two times seven power...