735 at 7% for 2 1/2 years?

1 Answer
Jan 25, 2018

Answer:

#A ~~ color(red)(873.95)#

Explanation:

Assumed that interest is compounded half yearly.

Formula for total amount is

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

P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n = number of times the interest is compounded per year

Given : P = 735, r = 0.07, t = 5/2, n = 2

#A = 735 * (1 +( 0.07/2))^(2 * (5/2))#

#A = 735 * (2.07/2)^5 ~~ color (red)(872.95)#