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ss7ja [257]
3 years ago
15

Lyn invested $7,000 into a investment paying 3% interest, compounded semi-annually, twice a year. After five years, how much wou

ld the investment be worth? A=P(1+r/n)^nt
A.) $8,050.00
B.) $8,123.79
C.) $1,123.79
D.) $8,114.92
E.) $1,050.00
Mathematics
1 answer:
gayaneshka [121]3 years ago
3 0

Answer:

Option B.) $8,123.79

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=5\ years\\ P=\$7,000\\ r=0.03\\n=2  

substitute in the formula above  

A=\$7,000(1+\frac{0.03}{2})^{2*5}  

A=\$7,000(1.015)^{10}=\$8,123.79  

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