Question

Walter works for SCI Energy. His retirement plan contributions are $4,200 at the beginningof each 6-month period.Assume that the account grows at 5% semiannually for 15 years. Find the interestearned.

Answer 1

Given:

Principal = P = $4,200

Time = t = 15 years

Rate = r = 5% = 0.05

semiannually , n = 2

So, the total amount = A

`\begin{gathered} A=P\cdot(1+(r)/(n))^(nt)=4200\cdot(1+(0.05)/(2))^(2\cdot15) \\ \\ A=4200\cdot1.025^(30)=8809.78 \end{gathered}`

The interest earned = A - P = 8809.78 - 4200 = 4609.78

so, the answer will be The interest earned = $4,609.78