Answer:
$5,591.46
Step-by-step explanation:
Lets use the compound interest formula provided to solve this:
<em>P = initial balance</em>
<em>r = interest rate (decimal)</em>
<em>n = number of times compounded annually</em>
<em>t = time</em>
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First, change 2.5% into a decimal:
2.5% -> -> 0.025
Since the interest is compounded semiannually, we will use 2 for n. Lets plug in the values now:
The amount in the account after 4.5 years is $5,591.46