Answer:
$ 3,396.81
Step-by-step explanation:
The formula uses to calculate the amount of an investment after t years which is compounded is given as:
A = P(1 + r/n)^nt
Where:
A = Amount of Investment after t years
P = Principal = $3,000
r = Interest rate = 2.5 %
t = Number of years of Investment = 5 years
n = Compounding frequency = semi annually = 2
First, convert R percent to r a decimal
r = R/100
r = 2.5%/100
r = 0.025 per year,
Then, solve our equation for A
A = P(1 + r/n)^nt
A = 3,000.00(1 + 0.0125/2)^(2×5)
A = $ 3,396.81
The total Investment from compound interest on an original principal of $3,000.00 at a rate of 2.5% per year compounded 2 times per year over 5 years is $ 3,396.81.
