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if a person invests $1,000 into an account that earns 8% which is compounded twice a year, then what will be the amounts in 2 years?

1 Answer

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The compounded interest can be found by the formula


A=P\cdot(1+(r)/(n))^(n\cdot t)

where P is the initial investment, r is the rate in which the account increases in decimal form and n will be the number of coumpounding done in a year.

Replace the data into the formula.


A=1,000\cdot(1+(0.08)/(2))^(2\cdot t)

find the amount in 2 years, by giving t the value of 2.


\begin{gathered} A=1,000\cdot(1+(0.08)/(2))^(2\cdot2) \\ A=1,000\cdot(1.04)^4 \\ A\cong1169.86 \end{gathered}
User Joseph Gabriel
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