Question

Question 5725

Answer 1

Answer:

The amount in the account at the end of 1 year will be $ 2,626.56, and the interest generated will be $ 126.56.

Explanation:

Given that Michael Arthur deposited $ 2,500 in a new regular savings account that earns 5% interest compounded semiannually, and has made no other deposits or withdrawals, to determine what was the amount in the account at the end of 1 year and what is the compound interest the following calculations must be performed:

2,500 x (1 + 0.05 / 2) ^ 1x2 = X

2,500 x 1,025 ^ 2 = X

2,500 x 1.050625 = X

2,626.56 = X

2626.56 - 2500 = 126.56

Therefore, the amount in the account at the end of 1 year will be $ 2,626.56, and the interest generated will be $ 126.56.