Question

3.

Find the compound amount. Round to the nearest cent.

Amount: $23,400
Rate: 3%
Compounded: semiannually
Time (Years): 10


$31,516.52

$27,156.64

$26,910.00

$31,447.73

Answer 1

Using Compound interest formula:

The exponential function for calculating the amount of money after t years, A(t), where P is the initial amount or principal, the annual interest rate is r and the number of times interest is compounded per year is n, is given by

`A(t) = p(1+ (r)/(n) )^(nt)`

from the given information:
p = 23,400 , r = 0.03 , t =10 and compounded semiannually ⇒⇒⇒ n = 2

Amount after 10 years =

`A(t) = 23400(1+ (0.03)/(2) )^(2*10)` = 31,516.4