Felipe deposited S4000 into an account with 5.8% interest, compounded semiannually. Assuming that no withdrawals are made, how much will he

Question

Felipe deposited S4000 into an account with 5.8% interest, compounded semiannually. Assuming that no withdrawals are made, how much will he have in the
account after 8 years?
Do not round any intermediate computations, and round your answer to the nearest cent.

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Lydia 2 weeks 2021-09-08T20:52:27+00:00 2 Answers 0

Answers ( )

    0
    2021-09-08T20:53:52+00:00

    Answer: he would have $6319.8 after 8 years.

    Step-by-step explanation:

    We would apply the formula for determining compound interest which is expressed as

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

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = $4000

    r = 5.8% = 5.8/100 = 0.058

    n = 2 because it was compounded twice in a year.

    t = 8 years

    Therefore,

    A = 4000(1 + 0.058/2)^2 × 8

    A = 4000(1 + 0.029)^16

    A = 4000(1.029)^16

    A = $6319.8

    0
    2021-09-08T20:54:17+00:00

    Answer:

    Amount in the account after eight years = $9858.95

    Step-by-step explanation:

    Compound interest is given by:

    A=P*(1+r)^n

    Where:

    A = final amount

    P = Initial Balance

    r = Rate of interest

    n = number of time periods elapsed

    Here, P = 4000; r = 5.8/100;

    n:

    For every year, the interest is compounded twice (semiannually).

    Hence, for eight years, there are 16 time periods.

    n = 16.

    A = 4000*[(1+0.058)^16] = 9858.95$

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