Question

You deposit $3500 in a savings account that has a rate of 6% compounded semiannually. How much is in the account after 3 years?

Answer 1

$4,179

Explanation:

According to the scenario, calculation of the given data are as follows,

Total deposit (P)= $3,500

rate of interest = 6%

Rate of interest (semiannual) (r) = 3%

Time = 3 years

Time period (t) (semiannual) = 6

So, we can calculate the total amount after 3 years by using following formula,

FV = P
`(1+r)^(t)`

By putting the value, we get

FV = $3,500 ( 1 + 0.03)^6

FV = $3,500 ( 1.03)^6

= $3,500 × 1.194

= $4,179