Question

kelly plans to put her graduation money into an account and leave it there for 4 years while she goes to collge she recieves $750 in graduation money that she put into an account that earns 4.25% interest compound semi annually how much will be in kellys account at the end of four years

Answer 1

`FV=887.3967212` $

Explanation:

Use the compound-interest formula:

`FV=PV(1+(r)/(n)) ^(nt)`

Where:

FV=Future value or the ending amount

PV=Present value or the initial amount=750

n=Number of compoundings in any one year=2

t=Total number of years=4

r=interest rate=0.0425

Now, replacing the data in the equation:

`FV=750*(1+(0.0425)/(2)) ^(2*4) =887.3967212` $