Question

At the end of a 5-year term, what is the balance of an $8,000 investment at a rate of 1.8 percent compounded semi-annually? Round to the nearest dollar.

Answer 1

=$8750

Step-by-step explanation:

Principal amount 8000

Interest rate 1.8 percent per year = 0.018

Number of times compounded per year 2

Number of years 5

Amount after 5 years = 8000 ( 1 +0.018 / 2)^(10)

= 8000(1.009)^(10)

Amount after 5 years = $ 8,749.87

=$8750