Question

Latoya deposited $4000 into an account with 3.7% interest, compounded semiannually. Assuming that no withdrawals are made, how much will she have in the account after 5 years?Do not round any intermediate computations, and round your answer to the nearest cent.

Answer 1

Given:

`\begin{gathered} P=\text{ \$4000} \\ r=3.7\text{ \%}=(3.7)/(100)=0.037 \\ n=2.....................(semiannually) \\ t=5years \end{gathered}`

Using the compound interest formula;

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

Substituting the values into the formula:

`\begin{gathered} A=4000(1+(0.037)/(2))^(2*5) \\ A=4000(1+0.0185)^(10) \\ A=4000(1.0185)^(10) \\ A=4000*1.0185^(10) \\ A=4804.74 \end{gathered}`

Therefore, the amount she will have in the account after 5 years is $4,804.74