1. ## Compound Interest?

I don't really see what i'm doing wrong...can someone help me out?

thanks

2. It's hard to say what you did wrong when you don't show what you did! I suspect that you used the formula, P(1+ r)^n, where n is the number of compounding periods and r is the interest per compounding period, incorrectly. It looks like you used n= 4, which is correct, compounding every have year for two years means compounding 4 times, but used r= .03 which is wrong. An interest rate of 3% means 3/2= 1.5% or .015 semi-annually.

3. Or calculate the semi-annual rate the \$332 results at:

6000(1 + i)^4 = 6332
1 + i = (6332 / 6000)^(1/4)
i = .01355...

That's ~1.36% compared to 1.5% ; so A is better.

4. i punched in .015 and 1.5 for the rate of interest per compounding period but both are wrong..maybe my other work is wrong? and yeah that's the formula i used.

5. You're asking us to guess...wrong in what way? Did you change number of periods from 2 to 4?

6. the way it goes is i have to punch in values to the blank spaces then press submit, if its wrong it says incorrect.

7. sigh...

8. ...yeah i see i'm getting no where here, guess i'll just email my teacher and ask her for help.

9. Good idea; let us know what you find out...

10. ah i see where i went wrong...

A=P(1+r/n)^nt

$P=6000$
$r=0.03$
$n=2$
$t=2$

A = 6000(1.015)^4 = 6368.18

11. Originally Posted by lilwayne
ah i see where i went wrong...

A=P(1+r/n)^nt

A = 6000(1.015)^4 = 6368.18
Yes. You were told that clearly by HallsofIvy.