Eddie deposited $1200 into an account that earns 3% interest compounded 2 times per year. How much money will Eddie have in his account after 7 years?

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Eddie deposited $1200 into an account that earns 3% interest compounded 2 times per year. How much money will Eddie have in his account after 7 years?

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Answer 1 · 2018-06-05T03:03:54

$$ 1, 478.11$ $$1,478.11$

Explanation:

Here we will use the compound interest formula below:

$A_{t} = P {(1 + \frac{r}{n})}^{n \cdot t}$ $A_t = P(1+r/n)^(n*t)$

Where:

$P =$ $P=$ Principal amount
$r =$ $r =$ Annual rate
$n =$ $n=$ Number of times compounded per year
$t =$ $t=$ Number of years
$A_{t} =$ $A_t=$ Amount after t years

In this example:

$A_{7} = 1200 {(1 + \frac{0.03}{2})}^{7 \times 2}$ $A_7 = 1200(1+0.03/2)^(7xx2)$

$= 1200 \times {(1.015)}^{14}$ $= 1200xx(1.015)^14$

$\approx 1200 \times 1.2317557$ $approx 1200 xx 1.2317557$

$= $ 1, 478.11$ $=$1,478.11$ to nearest cent

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Eddie deposited $1200 into an account that earns 3% interest compounded 2 times per year. How much money will Eddie have in his account after 7 years?

1 Answer

Explanation:

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