Pam, when she turned 25, made an investment of $20000 at an interest rate of 6.5% compounded semi-annually. Now that she is 50 years old, how much is the investment worth now

The worth of the investment now is $98,976.71.

Explanation:

Since this is an investment made in the past which we wan to determine its worth now, the relevant formula to use is the formula for calculating the future value (FV) of an investment given as follows:

FV = P * (1 + r)^n (1)

Where;

FV = future value or the worth of the investment now = ?

P = Invested amount = $20,000

r = Semiannual interest rate = 6.5% / 2 = 3.25%, or 0.0325

n = number of semi-annuals = 25 years * 2 = 50

Substituting the values into equation (1), we have:

FV = $20,000 * (1 + 0.0325)^100

FV = $20,000 * 4.94883548155771

FV = $98,976.71

Therefore, the worth of the investment now is $98,976.71.

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