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The amount will be equal to $1348.07. The correct option is A.
<h3>What is compound interest?</h3>Compound interest is the interest levied on the interest. The formula for the calculation of compound interest is given as:-
Compound Interest Formula:
A = Account Balance
P = Principle/Initial Amount
r = Rate of Interest (decimal)
n = Number of times compounded (per year)
t = Number of Years
Given Information
Account Balance = ?
It is given that the balance after 15 years in a savings account earns 2% interest compounded bi-monthly when the initial deposit is 1000.
This is because we are gaining money, so the multiplier should be greater than 1. We already added 1, which is 100% so you simply add the 0.02 for the extra 2%.
Number of times compounded per year = 6
This is because it is being compounded bi-monthly, or once every 2 months. 12 months divided by 2 months is 6 months, so 6 times a year.
Number of years = 15
Solve by plugging the given values into the formula.
A = 1000 x (1.14)
A = $1348.07.
Therefore, the amount will be equal to $1348.07. The correct option is A.
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