Question

How much money will you have at the end of one year if interest is compounded semiannually at 10% on a $600 deposit?

a. $662.00
b. $660.00
c. $659.50

Answer 1

The formula required to answer this is:

`A=P(1+(r)/(n))^(nt)`
where A is the amount of the principal P after n compounding periods per year at r interest rate (as a decimal fraction).
Plugging in the given values, we get:

`A=600(1+(0.1)/(2))^(2*1)=661.5`
Rounding to the nearest dollar, we get $662.00. Therefore a is the best answer choice.