Answer:
To calculate the maturity value of the investment, we'll use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (initial deposit)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per unit t
t = the time the money is invested for, in years
Given:
P = $10,900
r = 6% or 0.06
n = 2 (compounded semiannually)
t = 6 years
Plugging these values into the formula:
A = 10900(1 + 0.06/2)^(2*6)
Calculating this will give us the maturity value of the investment.
