An investment of $5000 grows at an annual interest rate of 6%, compounded semi-annually. What will be the investment value after 4 years?

Mon, 04 May 2026 17:43:13 +0000

**An investment of $5000 grows at an annual interest rate of 6%, compounded semi-annually. What will be the investment value after 4 years?** What investment scenario is quietly shaping minds across the U.S. right now? A $5,000 principal growing at 6% annual interest, compounded every six months—why it matters, and how your money can build steadily over time. This isn’t just a math exercise—it’s a practical illustration of compound interest that even busy Americans are beginning to explore for long-term planning, retirement savings, or personal wealth growth. The key to understanding this calculation lies in how interest accrues. With a 6% annual rate compounded semi-annually, interest is calculated twice a year, meaning the growth cycles faster than simple annual compounding. Each six-month period applies a 3% return on the current balance, so over four years—eight compounding cycles—your initial $5,000 earns interest repeatedly, accelerating total growth. Let’s break it down simply, based on a straightforward formula:
**A = P(1 + r/n)^(nt)**
Where:
- A = final amount
- P = $5,000 principal
- r = 6% annual rate = 0.06
- n = 2 (semi-annual compounding)
- t = 4 years