226k views
1 vote
Person deposits $5000 in an account paying 2.7%, compounded semiannually. find the amount in the account after 5 years

a) $5395.12
b) $5387.56
c) $5432.11
d) $5424.67

User Dionysian
by
7.6k points

1 Answer

1 vote

Final answer:

The question was to calculate the amount in the account after 5 years for $5000 with a semiannual compound interest rate of 2.7%. Using the compound interest formula, the final amount is calculated to be $5718.43. None of the provided options match this calculated value.

Step-by-step explanation:

The student wants to find the final amount in an account after 5 years when $5000 is deposited at an interest rate of 2.7%, compounded semiannually. To calculate this, we can use the formula for compound interest:

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

Where:

  • A is the amount of money accumulated after n years, including interest.
  • P is the principal amount (the initial amount of money).
  • r is the annual interest rate (decimal).
  • n is the number of times that interest is compounded per year.
  • t is the time the money is invested for, in years.

By plugging in the values:

  • P = $5000
  • r = 2.7% or 0.027
  • n = 2 (since it is compounded semiannually)
  • t = 5 years

The calculation would be:

A = 5000(1 + 0.027/2)^(2*5)

A = 5000(1 + 0.0135)^(10)

A = 5000(1.0135)^(10)

A = 5000(1.143685823588)

A = $5718.43

None of the provided options correctly match the calculated amount. It seems like there might be an error in the options given. The correct answer calculated is $5718.43.

User Kemotoe
by
7.9k points