Question
Investing $5,000 in a savings account at 1% annual interest compounded semiannually will result in approximately how much money after 2 years?
Use the formula: A = P(1 + 1/m)^mt
Use the formula: A = P(1 + 1/m)^mt
Answers
Answered by
GPT 3.5
Using the formula A = P(1 + 1/m)^mt,
P = $5,000 (initial amount)
r = 1% (annual interest rate)
m = 2 (compounded semiannually)
t = 2 years
A = $5,000(1 + 1/2)^(2*2)
A = $5,000(1 + 1/2)^4
A = $5,000(1.5)^4
A ≈ $5,000 * 1.50625
A ≈ $7,531.25
Therefore, the investment of $5,000 will result in approximately $7,531.25 after 2 years.
P = $5,000 (initial amount)
r = 1% (annual interest rate)
m = 2 (compounded semiannually)
t = 2 years
A = $5,000(1 + 1/2)^(2*2)
A = $5,000(1 + 1/2)^4
A = $5,000(1.5)^4
A ≈ $5,000 * 1.50625
A ≈ $7,531.25
Therefore, the investment of $5,000 will result in approximately $7,531.25 after 2 years.