Question

Nick opened a savings account 11 years ago with a deposit of $3,772.59. The account has an interest rate of 5.8% compounded twice a year how much interest has nelson earned.

Answer 1

A = P(1 + r)ⁿ , where P is the initial amount, r = YEARLY rate and A = new value.

But if the interest is to be paid twice a year that means a period of 2 times a year, then r = r/2 and n = 2n

A = 3,772.59(1+ 0.058/2)²²
A = 7,075.84
Total interest earned: 7,075.84 - 3,772.59 = 3,303.25