I'm not sure where I should put this...
I don't need help with solving this problem; I just have a question about one part. (note: n is an exponent)
A=p(1+r)n is the compound-interest formula. In this formula, A = the amount, p = the principal, r = the rate of interest per period, and n = the number of periods.
In how many years will $100 amount to $200 at 4% compounded semianually? (A = 200, p = 100, and r = .02. Remember that n is the number of half years.)
My question is about r. Why does r = 4% and also 2%?! When it says 2% does that mean that it's the rate of interest per half year as opposed to 4%, which is for the whole year?
Thanks.
I don't need help with solving this problem; I just have a question about one part. (note: n is an exponent)
A=p(1+r)n is the compound-interest formula. In this formula, A = the amount, p = the principal, r = the rate of interest per period, and n = the number of periods.
In how many years will $100 amount to $200 at 4% compounded semianually? (A = 200, p = 100, and r = .02. Remember that n is the number of half years.)
My question is about r. Why does r = 4% and also 2%?! When it says 2% does that mean that it's the rate of interest per half year as opposed to 4%, which is for the whole year?
Thanks.
tyvm