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23 June, 02:26

Cindy invests $10000 in an account that pays an annual rate of 3.96%, compounding semi-annually. approximately how much does she have in her account after two years?

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  1. 23 June, 02:33
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    Annual Compound Formula is:

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

    Where:

    A is the future value of the investment

    P is the principal investment

    r is the annual interest rate

    n is the number of interest compounded per year

    t is the number of years the money is invested

    So for the given problem:

    P = $10,000

    r = 0.0396

    n = 2 since it is semi-annual

    t = 2 years

    Solution:

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

    A = $10,000 (1 + 0.0396/2) ^ (2) (2)

    A = $10000 (1.00815834432633616)

    A = $10,815.83 is the amount after two years
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