asked 64.3k views
4 votes
Jessica invest $7,873 in a savings account with a fixed annual interest rate of 6% compounded 2 times per year. What will the account balance be after 4 years?

asked
User Cynara
by
8.3k points

1 Answer

4 votes
We can solve this using the formula for compound interest:

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

Where:
A = the final amount
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the time (in years)

Substituting the given values:

P = $7,873
r = 6% = 0.06
n = 2 (compounded 2 times per year)
t = 4

A = $7,873(1 + 0.06/2)^(2 * 4)
A = $10,340.47

Therefore, the account balance will be $10,340.47 after 4 years.
answered
User Jisoo
by
8.1k points
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