Question

Suppose that 2000 is invested at a rate of 2.4% , compounded semiannually. Assuming that no withdrawals are made, find the total amount after 9 years.

Do not round any intermediate computations, and round your answer to the nearest cent.

Answer 1

$2479.02

Explanation:

The invested amount is $2000 at a rate of 2.4% which compounds semiannually.

Therefore, the semiannual interest rate is
`(2.4)/(2) = 1.2`%.

Then the principal is compounded (9 × 2) = 18 times within a period of 9 years.

If there is no withdrawal from the account, then after 9 years the sum will become

`2000(1 + (1.2)/(100) )^(18) = 2479.02` dollars {Rounded to the nearest cent} (Answer)