If $10,000 is invested at 10 percent annual interest, compounded semiannually, what is the balance after 1 year? Solution: Th e balance after the first 6 months would be 10,000 + (10,000)(0.05) = $10,500. Th e balance after one year would be 10,500 + (10,500)(0.05) = $11,025.