Question

Lyla invests $2,500 into a savings account

which earns 5% per year. In 15 years, how
much will Lyla's investment be worth if interest
is compounded semiannually (twice a year)?
Round to the nearest dollar.

Answer 1

We can use the formula for compound interest to find the future value of Lyla's investment:

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

where A is the future value, P is the principal (initial investment), r is the annual interest rate as a decimal, n is the number of times interest is compounded per year, and t is the time in years.

Substituting the given values, we get:

A = $2,500(1 + 0.05/2)^(2*15)

Simplifying, we get:

A = $2,500(1.025)^30

Using a calculator, we get:

A ≈ $5,016.35

Therefore, Lyla's investment will be worth approximately $5,016.35 in 15 years if interest is compounded semiannually. Rounded to the nearest dollar, the answer is $5,016.