How much money will you have at the end of one year if interest is compounded semiannually at 10% on a $600 deposit?
A. $661.50
B. $659.50
C. $662.00
D. $660.00
i think it's d but not sure
amount = 600(1.05)^2
= ...
how can you not be sure ?
To figure out the correct answer, we need to use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future amount after interest
P = the principal amount (initial deposit)
r = the annual interest rate (in decimal form)
n = the number of times interest is compounded per year
t = the number of years
Given:
P = $600 (principal amount)
r = 10% (annual interest rate, which is equivalent to 0.10 in decimal form)
n = 2 (since interest is compounded semiannually, half-yearly)
t = 1 (since we're calculating the amount at the end of one year)
Now let's substitute these values into the formula:
A = 600(1 + 0.10/2)^(2 * 1)
A = 600(1 + 0.05)^2
A = 600(1.05)^2
A = 600(1.1025)
A ≈ $661.50
So, the correct answer is A. $661.50.