Question

1,030 at 4% compounded semiannually for 2 years

Answer 1

Answer: $1114.91

Explanation:

The formula for compound interest is

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

Where

A = final amount

P = initial principal balance (1030 for this)

r = interest rate (0.04 for this)

n = number of times interest applied per time period (2 for this)

t = number of time periods elapsed (2 for this)

`A= 1030(1+(.04)/(2))^((2)(2)) \\\\A= 1030(1+0.02)^(4) \\A=1030(1.02)^4\\A=1114.905125`

This rounds up to $1114.91