Question

Interest is compounded semianually. Find the amount in the account after the given time.

Answer 1

$1,159.69

Explanation:

Compound Interest Formula :

• A = P (1 + r/n)^(nt)

1. A = amount
2. P = principal
3. r = rate (in decimals)
4. n = number of times compounded
5. t = number of years

Solving :

• A = (1,000)(1 + 0.05/2)²⁽³⁾
• A = (1,000)(1.025)⁶
• A = (1,000)(1.15969342)
• A = $1,159.69