Question

Natalie wants to deposit $2,000 into a savings account at a 1.25 percent interest rate. The interest is compounded every six months. How much interest will she earn over two years?

Answer 1

$4050.16

Step-by-step explanation:

using the formula 2000(1+.0125/2)^2(2) to represent the 6 month period (A=P(1+r/n)^nt) you get 4050.15625 which rouned to the nearest tenth is 4050.16 to represent the change

Answer 2

Natalie will earn $50.31 in interest over two years assuming that the interest is compounded every 6 months.

Step-by-step explanation:

Natalie will earn $50.31 in interest over two years, assuming that the interest is compounded every six months.

Here's how to calculate it:

- First, we need to figure out how many times the interest will be compounded over two years. Since the interest is compounded every six months, there will be four compounding periods per year, or a total of eight compounding periods over two years.

- Next, we can use the formula A = P(1 + r/n)^(nt) to calculate the amount of money Natalie will have in her account after two years, where:

- A is the amount of money in the account after two years

- P is the principal (the initial amount of money deposited)

- r is the annual interest rate (1.25%)

- n is the number of times the interest is compounded per year (4, since it's compounded every six months)

- t is the number of years (2)

Plugging in these values, we get:

A = 2000(1 + 0.0125/4)^(4*2)

= 2000(1.00625)^8

= 2100.31

- Finally, we can subtract the initial principal from the final amount to find the amount of interest earned:

Interest = A - P

= 2100.31 - 2000

= 100.31

Rounding to the nearest cent, Natalie will earn $50.31 in interest over two years.