Question

Your aunt is planning to invest in a bank CD that will pay 5.0 percent interest semiannually. If she has $6,000 to invest, how much will she have at the end of four years

Answer 1

Answer:

amount would get = $7310.41

Explanation:

given data

pay interest = 5 % = 0.05

invest = $6000

to find out

how much will she have at end of four years

solution

we get here Interest is compounded semi annually  

Interest = $\frac{0.05}{2}$

Interest 0.025 = 2.5 %

so here we have 4 year so here 8 semi annual period

amount would get = invest ×  $(1+rate)^{time}$

amount would get = $6,000 ×  $(1+0.025)^{8}$

amount would get = $7310.41