Question

Victoria invests $300 into an account with a 2.5% interest rate that is compounded semiannually.

How much money will she have in this account if she keeps it for 5 years?

Answer 1

After 5 years Victoria will have $339.68125

Explanation:

As per the question,

The principal amount is $300

The rate of Interest is 2.5%

Interest compounded per year = 2
Time = 5 years

Now, as per the compound interest formula,

Total money after 5 years = 300 {(1+2.5/100)/2) power 2.5 = 399.68125

Therefore Victoria after 5 years will be having $ 399.68125