344,414 views
14 votes
14 votes
David invests $800 into an account with a 2.3% interest rate that is compounded semiannually.

How much money will he have in this account if he keeps it for 5 years?
Round your answer to the nearest dollar.

User Marcellino Corleone
by
3.3k points

2 Answers

9 votes
9 votes

Answer:

$897

Explanation:

We know:

P = 800

n = 2

r = 2.3

t = 5

Write Equation:


F = 800(1+((2.3)/(100) )/(2) )^(2(5))

Evaluate:

896.9

Thus the answer is $897

User Kptlronyttcna
by
3.3k points
24 votes
24 votes

To calculate how much money David will have in this account after 5 years, we first need to find out how much interest the account earns each year. To do this, we need to multiply the interest rate by the amount of money in the account. In this case, the interest earned each year would be $800 * 0.023 = $18.40.

Next, we need to calculate how much interest the account earns over the 5-year period. Since the interest is compounded semiannually, this means that the interest is earned twice per year. Therefore, the total amount of interest earned over 5 years would be $18.40 * 2 * 5 = $184.

Finally, we need to add the interest to the original amount of money in the account to find out how much money David will have after 5 years. In this case, the total amount of money David will have after 5 years is $800 + $184 = $984.

Therefore, if David keeps the money in this account for 5 years, he will have $984.

User Spearson
by
2.8k points
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