Question

If you deposit $24,500 into a bank account paying 6% annual interest compounded

semi-annually for 5 years, how much interest will you earn? Round to the nearest cent.

Answer 1

$7,719.33

Explanation:

$24,500 x 0.06 = $1,470

($24,500 + $1,470) x 0.06 = $1,558.20

($24,500 + $1,558.20) x 0.06 = $1,563.49

($24,500 + $1,563.49) x 0.06 = $1,563.81

($24,500 + $1,563.81) x 0.06 = $1,563.83

$1,470 + $1,558.20 + $1,563.49 + $1,563.81 + $1,563.83 = $7,719.33