Question

Find and balance the account :

$4,800 principal earning 1%, compounded semi-annually, after 24 years
A $6,094.73
B $6,098.35
C $5,410.37
D $232,704.00

Answer 1

Answer: B - $6,098.35

Explanation:

This is a compound interest question. The compound interest formula is:

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

A = Future amount of investment

P = Starting amount of investment

r = Rate of interest

n = Number of times interest compounds per year

t = Time (Years)

You must turn the percentage (1%) into a decimal by dividing by 100

1/100=.01

So, the equation for this question is:

A = 4,800(1+
`(.01)/(2)`)^(2)(24)

A = 4800(1.005)^48

A = 4800(1.2704891611)

A = 6,098.35