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Periodic Deposit: $7500 at the end of every six months Rate: 5% compounded semianually Time: 3 years

A) $165,375; $120,375
C) $47,908; $2908
B) $347,908; $302,908
D) $39,422; $5578

1 Answer

3 votes

Final answer:

The amount of money accumulated through periodic deposits with compounding interest can be calculated using the formula A = P(1 + r/n)^(nt). By plugging in the values, we find that the correct answer is $47,908.

Step-by-step explanation:

To calculate the total amount of money accumulated through periodic deposits with compounding interest, we can use the formula:

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

Where:
P = Amount deposited per period ($7500)
r = Interest rate per period (5% or 0.05)
n = Number of times the interest is compounded per year (2)
t = Number of years (3)

Plugging in the values, we get:

A = 7500(1 + 0.05/2)^(2*3)

After simplifying the equation, we find that the amount of money accumulated through periodic deposits is $47,908. Therefore, the correct answer choice is C) $47,908; $2908.

User Ankit Bohra
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