Question

2. On December 31, Juan Carlos made a $ 7,000 deposit in an account that pays 2.975% interest compounded semi-annually. How much will be in that acqount at the end of two years.

Answer 1

Answer:$ 7425.89

Step-by-step explanation:

Formula to find the compound amount ( compounded semiannually) :-

$A=P(1+\dfrac{r}{2})^{2n}$ , where P is the principal amount, r is rate of interest ( in decimal), and n is time in years.

Given : P= $7000

r=2.975%=0.02975

Time : n= 2

Then, The amount in account after 2 years:-

$A=7000(1+\dfrac{0.02975}{2})^{2\times2}\\\\=7425.88565609\approx7425.89$

Hence, Amount in account after 2 years = $ 7425.89