Question

George deposited $750.00 into an account that earns 7% interest which is compounded 2 times per year. How much money will George have in his account in 5 years?

Answer 1

Amount in compound interest = p(1 + r/t)^nt where p is the initial deposit, r = rate, t = number of compunding in a period and n = period.

Here, Amount after 5 years = 750(1 + (7/100)/2)^(5 x 2) = 750(1 + 0.07/2)^10 = 750(1 + 0.035)^10 = 750(1.035)^10 = 750(1.410599) = $1,057.95