Question

Riley invested $1,000 in bonds. If the bonds earn 6.75% interest compounded semi- annually, how much total will Riley earn in 15 years?

a) $1,584.62
b) $2,651.39
c) $2,706.86
a) $1,825.10

Answer 1

Riley will earn a total of $2,706.86 in 15 years.

Step-by-step explanation:

To calculate the total amount Riley will earn in 15 years, we need to use the compound interest formula: A = P(1 + r/n)^(nt), where A is the total amount, P is the principal (initial investment), r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years.

In this case, P = $1,000, r = 6.75% = 0.0675, t = 15 years, and n = 2 (compounded semi-annually).

Using these values, the total amount Riley will earn is: A = $1,000(1 + 0.0675/2)^(2*15) = $2,706.86.

Therefore, the correct answer is c) $2,706.86.