Question

An account is opened with an initial deposit of 2500 and earns 1.8% interest compounded simi annually what will the account be worth in 30 years

4,279.66
is the answer

Answer 1

Final amount = $4279.667.

Explanation:

Formula to get the final amount after 't' years is,

Final amount =
`\text{Initial amount}* (1+(r)/(n) )^(nt)`

Here 'r' = rate of interest

t = Number of years for the investment

n = Number of compounding in a year

Now we substitute the data given in the question,

Initial amount = $2500

r = 1.8% = 0.018

n = Semi annually = 2

t = 30 years

Final amount =
`2500(1+(0.018)/(2))^((2* 30))`

=
`2500(1.009)^(60)`

= 4279.667

Therefore, final amount will be $4279.667.