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iley invested $1,000 in savings bonds. If bonds earn 6.75% interest compounded semi-annually, how much will riley earn in 15 years?

Sagot :

Answer: Riley will earn 2707 in 15 years

Explanation:

The formula for calculating compound interest is expressed as

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

where

A is the final amount after t years

A is the principal or initial amount

r is the interest rate

n is the number of compounding periods in a year

t is the time

From the information given,

P = 1000

r = 6.75% = 6.75/100 = 0.0675

t = 15

n = 2 because it was compounded twice in a year

By substituting these values into the formula,

A = 1000(1 + 0.0675/2)^2 * 15

A = 1000(1.03375)^30

A = 2707

Riley will earn 2707 in 15 years

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