$3,000 is invested into a savings account paying 6% interest compounded semiannually for 6 years. The first few lines of a table showing how the balance will grow over time are shown below.
i = r/ppy = .06 / 2 = 0.03 n = t * ppy = 6 * 2 = 12
A. Complete the lines for periods 1 and 2. (Remember that the fictitious period zero is for graphing purposes only.)
B. What is the future value of this investment?
A = P(1+i)n = 3000(1.03)12 = 4,277.28
C. How much interest will be earned over the term of this investment?
I = A-P = 4277.28-3000 = 1,277.28
D. What is the annual percentage yield of this investment?
APY = (1+i)ppy-1 = 1.032-1 = 6.090%