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Lesson 3-3 Example 3 3-3 Step 1Write the compound interest formula. Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually.

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Presentation on theme: "Lesson 3-3 Example 3 3-3 Step 1Write the compound interest formula. Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually."— Presentation transcript:

1 Lesson 3-3 Example Step 1Write the compound interest formula. Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually. Use a spreadsheet or calculator to help you. Round the answer to the nearest cent.

2 Lesson 3-3 Example Step 2 How many times is interest paid per year? 2, n = 2 How many years is the investment? 4, t = 4 Let x = the amount of commission. Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually. Use a spreadsheet or calculator to help you. Round the answer to the nearest cent.

3 Lesson 3-3 Example Step 3 Substitute the values that you know. Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually. Use a spreadsheet or calculator to help you. Round the answer to the nearest cent.

4 Lesson 3-3 Example Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually. Use a spreadsheet or calculator to help you. Round the answer to the nearest cent. = 2,000 ( ) 2(4) = 2,000 (1.035) 2(4) = 2,000 (1.035) 8 = 2,000 (1.317) = 2, Step 4Simplify.

5 Lesson 3-3 Example Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually. Use a spreadsheet or calculator to help you. Round the answer to the nearest cent. $2, Step 5What is the value of the account at the end of 4 years?


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