Question

If you deposit $4000 into an account paying 6% annual interest compounded semi-

annually, how
much money will be in the account after 5 years?
$5387.42
$5375.66
$6546.61
$4706.14

Answer 1

`Hello!`

I say it's option B. $5375.66

`\left[\begin{array}{ccc}PROCESS:\end{array}\right]`

6% ⇒
`(6)/(100)` ⇒
`0.06`

`A =` 4,000
`(1+ (0.006)/(2))` ×
`2(5)`

`A=` $
`5375.66`

`\left[\begin{array}{ccc}ANSWER:\end{array}\right]`

$5375.66

`MiraculousAlejandra`

Answer 2

B. $5,375.66

Explanation:

Lets use the compound interest formula provided to solve this:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 6% into a decimal:

6% ->
`(6)/(100)` -> 0.06

Since the interest is compounded semi-annually, we will use 2 for n. Lets plug in the values now:

`A=4,000(1+(0.06)/(2))^(2(5))`

`A=5,375.66`

Your answer is B. $5,375.66