If $5,000 is invested at 3.2% annual interest compounded semiannually, how much will the investment be worth in 10 years? Drag and drop each value into the correct location in the Compound Interest equation. Note: Not all quantities will be used.

Given:

Principal = $5,000

Rate of interest = 3.2% annual interest compounded semiannually.

Time = 10 years.

To find:

The amount after compound interest.

Solution:

The formula for amount is:

Where, P is principal, r is rate of interest, n is number of times interest compounded and t is the number of years.

Putting P=5000, r=3.2, t=10, n=2, we get

On further simplification, we get

Therefore, the amount after compound interest is $6868.22.

a. -0.3 > -0.33