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spin [16.1K]
3 years ago
15

Mr zubair deposits $60, 000 into a bank, which pays 4% interest that is compounded semiannualy. what will he have in his account

at the end of five years and compound interest amount?​
Spanish
1 answer:
Tema [17]3 years ago
8 0

Answer:

• Amount in bank after 5 years = $73,140

• Compound interest = $13,140

Explanation:

The bank pays the interest semi-annually but the interest in quoted annually.

The periodic rate is:

= 4%/2

= 2%

The period will be:

= 5 years * 2 semi annual periods

= 10 semi annual periods.

Amount in bank after 5 years:

= 60,000 * ( 1 + 2%)¹⁰

= $73,140

Compound interest amount is therefore:

= 73,140 - 60,000

= $13,140

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