Question

keiko invested $2875 in a savings account which earns 3.15% interest compounded semiannually. What will the account be worth in 7 years?

Answer 1

Principal amount = P = $2875
Interest rate = r = 3.15% = 0.0315
Period = t = 7 years
Compunding periods = n = 2

The formula to be used is:

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

Using the values, we get:

$A=2875(1+ \frac{0.0315}{2})^{2*7} =3578.11$

Thus, the worth of the account after 7 years of saving will be $3578.11