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Elena is thinking about putting $200 in a savings account that earns 4% interest compounded semiannually. She wants to keep that money in the account for 4 years. Which of the formulas below can help her calculate how much money she will have at the end of the 4 years?

Respuesta :

Answer: The required formula is,

[tex]200(1+0.02)^8[/tex]

Step-by-step explanation:

Here, the principal amount, P = $ 200,

Annual rate of interest, r = 4 %,

Time, t = 4 years,

Number of periods in one year( semiannual in one year ), n = 2

Thus, the amount after 4 years, compounded semiannually is,

[tex]A=P(1+\frac{r/n}{100})^{nt}[/tex]

[tex]=200(1+\frac{4/2}{100})^{2\times 4}[/tex]

[tex]=200(1+\frac{2}{100})^8[/tex]

[tex]=200(1+0.02)^8[/tex]

Which is the required formula.

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