Question

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Answer 1

Interest earned = $32.835

Explanation:

Given the following data;

Principal = $275

Number of times = 0.5

Interest rate = 2.9% = 0.029

Time = 4 years

To find the interest earned, we would use the compound interest formula;

`A = P(1 + (r)/(n))^(nt)`

Where;

A is the future value.

P is the principal or starting amount.

r is annual interest rate.

n is the number of times the interest is compounded in a year.

t is the number of years for the compound interest.

Substituting into the equation, we have;

`A = 275(1 + (0.029)/(0.5))^(0.5*4)`

`A = 275(1 + 0.058)^(2)`

`A = 275(1.058)^(2)`

`A = 275(1.1194)`

A = $307.835

Interest earned = 307.835 - 275

Interest earned = $32.835