College Algebra (10th Edition)

Published by Pearson
ISBN 10: 0321979478
ISBN 13: 978-0-32197-947-6

Chapter 6 - Section 6.7 - Financial Models - 6.7 Assess Your Understanding - Page 475: 44

Answer

${{\$}} 215.48$

Work Step by Step

The amount A after t years due to a principal P invested at an annual interest rate r, expressed as a decimal, compounded n times per year is $A=P\displaystyle \cdot(1+\frac{r}{n})^{nt}$ --- compounded $n=12$ times per year$, r=0.0125\times 12$ (monthly rate given) $t=0.5, nt=6, $ $P=200$ $A=200\displaystyle \cdot(1+\frac{0.0125\times 12}{12})^{6}=200\cdot(1.0125)^{6}\approx 215.48$
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