# Math Help - Coumpound Interest Problem

1. ## Coumpound Interest Problem

I need help with a word problem. I thought I new how to do this, but apparently not.

"Following the birth of his child, Juan deposits $10,000 in a trust fund where interest is 6.4% compounded semiannually. " A) Find a function for the amount in the account after t years. This should be A=10,000(1+.64/2)^2(t) ??????? B)Find the amount of money in the account at t= 0,4,8,10,18. I just need to know how to do this part. I put this in on my calculator but the numbers don't seem realistic. A = 10,000(1+.64/2)^(2*0) , this one equals$10,000
A = 10,000(1+.64/2)^(2*4) , I'm getting 92170.39521

What am I doing wrong?

2. Edit:Made a substantial mistake; see this link for an explanation!
Compound Interest - Periodic Compounding

The wording threw me.

Essentially what this means is that you receive a 3.2% compound after the first 6 months, then a 3.2% compound after the next 6 months.

The starting amount is $A=10000$

This is compounded by $3.2\%$ after $6$ months:

$A=10000(1.032)$

...Then it's compounded again after another $6$ months:

$A=10000(1.032)(1.032)$

So after one year, you have

$A=10000(1.032)^2$

And after T years:

$A=10000(1.032)^{2t}$

I think they've missed out a decimal place in their answer, otherwise I have the same result.

3. Had to edit out a gaping error!