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Marilu invested $3,000 in a fund with an interest rate of 2.5% compounded semi-
annually. After 5 years what will the investment be worth?
A = P(1+)
$3,396.81
$9,633.10
$3,380.90
$3,518.18
$4,410.05

Sagot :

Answer:

$ 3,396.81

Step-by-step explanation:

The formula uses to calculate the amount of an investment after t years which is compounded is given as:

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

Where:

A = Amount of Investment after t years

P = Principal = $3,000

r = Interest rate = 2.5 %

t = Number of years of Investment = 5 years

n = Compounding frequency = semi annually = 2

First, convert R percent to r a decimal

r = R/100

r = 2.5%/100

r = 0.025 per year,

Then, solve our equation for A

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

A = 3,000.00(1 + 0.0125/2)^(2×5)

A = $ 3,396.81

The total Investment from compound interest on an original principal of $3,000.00 at a rate of 2.5% per year compounded 2 times per year over 5 years is $ 3,396.81.

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