Question

Nora's savings account has a balance of $3979. After 4 years, what will the amount of interest be at 12% compounded semiannually? a. $2367.92 c. $2362.92 b. $4774.80 d. $2353.92

Answer 1

The correct answer is C.$2362.92

Answer 2

Answer:

Option C  $I=\ 2,362.92$

Step-by-step explanation:

we know that

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal  

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=4\ years\\ P=\ 3,979\\ r=0.12\\n=2$  

substitute in the formula above  

$A=\ 3,979(1+\frac{0.12}{2})^{2*4}$  

$A=\ 6,341.92$  

Find the amount of interest

$I=\ 6,341.92-\ 3,979=\ 2,362.92$