Question

I NEED HELP PLEASE, THANKS! :) Heather invests $4,900 in an account with a 3.5% interest rate, making no other deposits or withdrawals. What will Heather’s account balance be after 5 years if the interest is compounded 2 times each year? (SHOW WORK)

Answer 1

Answer:    $5,828.28

Step-by-step explanation:

Use the Compound Interest formula:     $A=P(1+\frac{r}{n})^{nt}$       where

• A is the accrued amount (balance)
• P is the principal (initial amount invested)
• r is the interest rate (in decimal form)
• n is the number of times compounded each year
• t is the time of the investment (in years)

Given: P = 4,900

           r = 3.5% (0.035)

           n = 2

           t = 5

$A=4,900\bigg(1+\dfrac{0.035}{2}\bigg)^{2(5)}\\\\\\.\qquad = 4900(1.0175)^{10}\\\\\\.\qquad = \large\boxed{5,828.28}$