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Rhonda deposits $5,600 in a savings account that pays 11% interest, compounded semi-annually.a. How much interest does the account earn in the first six months?

a.$8400
b.$84
c.$504
d.$252

1 Answer

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Final answer:

The account earns $312 in the first six months.

Step-by-step explanation:

To find the amount of interest earned in the first six months, we need to use the formula for compound interest: A = P(1+r/n)^(nt), where A is the final amount, P is the principal amount, 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, Rhonda deposited $5,600 at an interest rate of 11% compounded semi-annually, so we have P = $5,600, r = 11% = 0.11, n = 2 (since interest is compounded semi-annually), and t = 0.5 years. Plugging these values into the formula, we get A = $5,600(1+0.11/2)^(2*0.5) = $5,600(1+0.055)^1 = $5,600(1.055) = $5,912. However, we only need to find the interest earned, so we subtract the principal amount from the final amount to get $5,912 - $5,600 = $312.

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