Find the amount in an account if $2000
is invested at 6.125%, compounded
semi-anually,for 2 years.
2000* (1.030625)^4 = /
That is what you get by adding 3.0625% to the principal every 6 months, and compounding 4 times
I Am getting 2252.50, is this correct?
To find the amount in the account after 2 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount in the account
P = the principal amount (initial investment)
r = the interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case, the principal amount is $2000, the interest rate is 6.125% (or 0.06125 as a decimal), the interest is compounded semi-annually (so n = 2), and the time period is 2 years.
Plugging in the values, we get:
A = 2000(1 + 0.06125/2)^(2*2)
= 2000(1 + 0.030625)^(4)
= 2000(1.030625)^(4)
≈ 2000 * 1.123615895
≈ 2247.23
So, after 2 years, the amount in the account is approximately $2247.23.
Your result of $2252.50 is close, but there may be a small rounding error or difference in calculation method. Please double-check your calculations or try using a calculator with more decimal places to ensure accuracy.