Question

Jacob invest $5,838 in a savings account with a fixed annual rate of 4% compounded 2 times per year. What will the account balance be after 8 years?

Answer 1

Am sorry, I have no idea

Answer 2

The account balance will be $8,014.32

Explanation:

To calculate the future value of a certain amount invested and compounded periodically, the following formula is used:

`FV= PV{(1+(r)/(n))^(n*t )`

where:

FV = Future value = ???

PV = Present value = $5,838

r = interest rate in decimal = 4% = 0.04

n = number of compounding period per year = 2

t = time in years

`FV= 5,838{(1+(0.04)/(2))^(2*8 )`

`FV= 5,838{(1+(0.02))^(16 )`

`FV= 5,838 * 5,838 = 8,014.32`

FV = $8,014.32