Question

A principal of $5500 is invested in an account paying an annual rate of 5%. Find the amount in the account after 3 years if the account is compounded semiannually.

a) $6482.35

b) $6575.43

c) $6654.58

d) $6723.11

Answer 1

After 3 years of compounding semiannually, the amount in the account with a principal of $5500 and an annual interest rate of 5% is $6723.11. Option d.

Step-by-step explanation:

To find the amount in the account after 3 years, we use the compound interest formula:

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

Where A is the amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

In this case, we have a principal of $5500, an annual interest rate of 5%, and interest is compounded semiannually (n = 2). Therefore, we calculate:

A = 5500(1 + 0.05/2)^(2 * 3)

A = $6723.11

Thus, after 3 years of compounding semiannually, the amount in the account is $6723.11.

Answer 2

After 3 years of compounding semiannually, the amount in the account with a principal of $5500 and an annual interest rate of 5% is $6723.11. The correct Option is d) $6723.11.

Step-by-step explanation:

To find the amount in the account after 3 years, we use the compound interest formula:

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

Where A is the amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

In this case, we have a principal of $5500, an annual interest rate of 5%, and interest is compounded semiannually (n = 2). Therefore, we calculate:

A = 5500(1 + 0.05/2)^(2 * 3)

A = $6723.11

Thus, after 3 years of compounding semiannually, the amount in the account is $6723.11. The correct Option is d) $6723.11.