# Math Help - interest rate problem

1. ## interest rate problem

A loan is made for 2,500 at an interest rate of 8% compounded semiannually for 3 years. what is the future value of this loan after the 3 year period

2. ## interest rate problem

Assuming the question means you repay the loan in full in three years, pay no interest in the interim, and interest accrual begins in six months, here's what I think:

8% semi-annually for 3 years = 4% every six months for 6 six-month periods. So we could solve:

$2,500 * (1.04)^6 =$3,163.

- Steve J