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Lea invests $8,333 in a savings account with a fixed annual interest rate of %8 compounded 2 times per year. What will the account balance be after 12 years?

Verified Answer :

wolf1728

Total = Principal (1 + rate/n)^nyears
Total = 8,333 (1 + .08/2) ^ 212
Total = 8,333 (1 + .04)^24

Total = 8,333 2.5633041649




Total = 21,360.01

 

Answer:

$21,360.01

Step-by-step explanation:

Formula for compound interest :

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A = Future amount

P = Principal amount ( $8,333)

r = rate of interest 8% (0.08)

n = number of compounding in a year (2)

t = time in years (12)

\(A=8,333(1+\frac{0.08}{2})^{(2)(12)}\)

\(A=8,333(1+0.04)^{(24)}\)

\(A=8,333(1.04)^{(24)}\)

A = 8,333(2.56330416)

A = 21,360.0136 ≈ $21,360.01

The account balance would be $21,360.01 after 12 years.

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