Investing $ 12000in a savings account at 2% annual interest compounded semiannually will result in approximately how much money after 5 years?
Use the formula: a=P(1)
a = P(1 + r/n)^(nt)
Where:
a = amount of money after t years
P = initial investment amount ($12000)
r = annual interest rate (2% or 0.02)
n = number of times interest is compounded per year (2 for semiannual)
t = number of years (5)
Plugging in the values:
a = $12000(1 + 0.02/2)^(2*5)
a = $12000(1 + 0.01)^10
a = $12000(1.01)^10
a = $12000(1.10462)
a ≈ $13255.44
Therefore, after 5 years, the investment of $12000 in a savings account at 2% annual interest compounded semiannually will result in approximately $13255.44.