Final answer:
To calculate the compound interest earned on John Lee's savings after 9 years with a 5% interest rate compounded semiannually, the compound interest formula is applied, and the final amount of interest is the difference between the future value and the initial principal.
Step-by-step explanation:
The student has asked about compound interest, which is a Mathematics topic typically covered in High School. To calculate the compound interest earned on John Lee's savings after 9 years with a 5% interest rate compounded semiannually, the compound interest formula is applied, and the final amount of interest is the difference between the future value and the initial principal.
To calculate the amount of interest accumulated on John Lee's savings account after 9 years at an interest rate of 5% compounded semiannually, the compound interest formula must be used:
For John's savings account:
Plugging these values into the formula results in:
Final Amount = $282 * (1 + (0.05/2))^(2*9)
Using a calculator, we find the final amount, and then subtract the principal to obtain the amount of interest earned:
Interest = Final Amount - Principal