Eddie deposited $1200 into an account that earns 3% interest compounded 2 times per year. How much money will Eddie have in his account after 7 years?

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Answer 1 · 2018-06-05T03:03:54

#$1,478.11#

Here we will use the compound interest formula below:

#A_t = P(1+r/n)^(n*t)#

Where:

#P=# Principal amount
#r =# Annual rate
#n=# Number of times compounded per year
#t=# Number of years
#A_t=# Amount after t years

In this example:

#A_7 = 1200(1+0.03/2)^(7xx2)#

#= 1200xx(1.015)^14#

#approx 1200 xx 1.2317557#

#=$1,478.11# to nearest cent