Quote:
How come does the compound interest formula not render the same result?
It does. Note that the interest is compounded every 6 months, while the given interest rate is the annual one. So the formula to use is:
F = I × (1 +
r/
n)ⁿª, where
F – final amount
I – initial amount
r – annual interest rate
n – number of times the interest is compounded per year
a – number of years
The interest is compounded every 6 months, in other words twice a year. Plug it in the formula along with other values:
F = $6,000(1 + 0.06 / 2) ²
F = $6365.4