Question

$40,000 is invested at a rate of 5.7% that is compounded semiannually.

How much money is in the account after 17 years?

Answer 1

$
`$78760.00`

Explanation:

You want to calculate the interest on $40000 at 5.7% interest per year after 17 years.

The formula we'll use for this is the simple interest formula, or:

`I=P*r*t`

Where:

• P is principal amount, $40,000

• r is the interest rate, 5.7% per year, or in decimal form,
  `(5.7)/(100) =0.057`

• t is the time involved, 17 years

To find the simple interest we multiply
`40000*0.057*17` to get

The interest rate is $38,760

Usually now, the interest is added onto the principal to figure some new amount after 17 years.

or 40000.00 + 38760.00 = 78760.00

=$78,760