Answer:
A. Find the amount of money in the account after 2 years:
To find the amount of money in the account after 2 years, we need to calculate the compound interest for each semiannual period and then add up the results.
1. First semiannual period:
Principal = $7,000
Interest rate = 3%/2 = 1.5%
Time = 1 year
Interest = $7,000 x 1.5% = $105
New principal = $7,000 + $105 = $7,105
2. Second semiannual period:
Principal = $7,105
Interest rate = 3%/2 = 1.5%
Time = 1 year
Interest = $7,105 x 1.5% = $105.75
New principal = $7,105 + $105.75 = $7,210.75
Therefore, after 2 years, the amount of money in the account will be:
$7,210.75
B. Find the interest earned:
To find the interest earned, we need to subtract the principal from the final amount:
Interest = $7,210.75 - $7,000 = $210.75
Therefore, the interest earned over the 2-year period is $210.75.
Bolded answer:
$7,210.75
Explanation: