Question

Michael arthur deported $2,900 in a new regular savings account that earns 5.5 percent interest compounded semiannually he made no other deposits or withdrawals a what is the amount in the account at the end of 1 year b what is the compound interest

Answer 1

Answer:

The amount in the account is $3062.4 (Approx) and compound interest is $162.4 .

Step-by-step explanation:

Formula for compounded semiannually

$Amount = P(1 + \frac{r}{2} )^{2t}$

Where P is the principle , r is the rate in decimal form and t is the time.

As given

Michael arthur deported $2,900 in a new regular savings account that earns 5.5 percent interest .

Here

Principle =  $2,900

5.5% is written in the decimal form.

$= \frac{5.5}{100}$

= 0.055

Time = 1 year

Put in the formula

$Amount = 2900\times (1 + \frac{0.055}{2} )^{2\times 1}$

$Amount = 2900\times (1 + 0.0275 )^{2\times 1}$

$Amount = 2900\times (1.0275)^{2}$

$Amount = 2900\times 1.056\ (Approx)$

Amount = $ 3062.4 (Approx)

Thus the amount after 1 years is $3062.4 (Approx) .

Now find out the compound interest .

Amount = Principle + Compound interest

Here

Amount = $ 3062.4  

Principle = $2,900

Put in the above

$3062.4   = $2,900 + Compound interest

Compound interest = $3062.4 -  $2,900

Compound interest = $162.4