Question

Fatima opened a savings account with $7,500. She decided to deposit that same amount semiannually. This account earns 3.975% interest compounded semiannually. Exercises 5-7 are about Fatima's account. 5. What is the future value of the account after 10 years?​

Answer 1

Answer:

A = $11117.25

Step-by-step explanation:

Given the following data;

Principal = $7,500

Interest rate = 3.975% = 3.975/100 = 0.03975

Number of times, n = 2

Time, t = 10 years

To find the future value, we would use the compound interest formula;

$A = P(1 + \frac{r}{n})^{nt}$

Where;

A is the future value.

P is the principal or starting amount.

r is annual interest rate.

n is the number of times the interest is compounded in a year.

t is the number of years for the compound interest.

Substituting into the equation, we have;

$A = 7500(1 + \frac{0.03975}{2})^{2*10}$

$A = 7500(1 + 0.019875)^{20}$

$A = 7500(1.019875)^{20}$

$A = 7500(1.4823)$

A = $11117.25