If you invest $100 at 8% for one year,compounded semiannually,at the end of the year your balance will be: (Use time value tables or financial calculator)

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we have:

A = P(1 + r/n)^(nt)

Where:
A = balance after one year
P = initial investment = $100
r = annual interest rate = 8%
n = number of times compounded per year = 2 (semiannually)
t = time in years = 1

Plugging in these values, we get:

A = 100(1 + 0.08/2)^(2*1)
A = 100(1.04)^2
A = 108.16

Therefore, the balance at the end of the year will be $108.16, so the best choice is C.

If You Invest $100 at 8% for One Year,compounded Semiannually,at