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A college savings account pays 8.2% annual interest compounded semiannually. What is the balance of an account after 12 years if $21,000 was initially deposited?​

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9514 1404 393

Answer:

$55,085.44

Explanation:

The formula for the account balance is ...

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

where principal P is invested at annual rate r compounded n times per year for t years. Using the given values, we find the balance to be ...

A = $21,000(1 +0.082/2)^(2·12) = $21,000(1.041^24) ≈ $55,085.44

The balance is $55,085.44 after 12 years.

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