217k views
0 votes
If you deposit $4500 into an account paying 7% annual interest compounded semi anualy , how much money will be in the account after 9 years?

User Tome
by
3.4k points

1 Answer

6 votes

Answer: $8359 will be in the account after 9 years.

Explanation:

We would apply the formula for determining compound interest which is expressed as

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

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = 4500

r = 7% = 7/100 = 0.07

n = 2 because it was compounded 2 times in a year.

t = 9 years

Therefore,

A = 4500(1+0.07/2)^2 × 9

A = 4500(1+0.035)^18

A = 4500(1.035)^18

A = $8359

User Brent L
by
3.6k points