Let's try something messier:
If we invest $20,000 in an account that pays 8% compounded semi-annually, how much will be in the account in 15 years?
initial amount = 20,000
At the end of each period (six months), we'll be earning 4%...
So, each $1.00 will turn into $1.04...
growth factor = $1.04
number of periods = 30
(That's twice a year for 15 years.)
(I rounded it to two places, since it's money.)
You invest $60,000 in an account that pays 9% compounded semi-annually. How much will you have in your account in 25 years?