To calculate the amount Lamar will have in the account after 7 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest
P = the principal amount (initial deposit)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested for
Given:
P = $4000
r = 3.2% = 0.032
n = 2 (compounded semiannually)
t = 7 years
Plugging the values into the formula:
A = $4000(1 + 0.032/2)^(2*7)
A ≈ $4000(1 + 0.016)^(14)
A ≈ $4000(1.016)^14
A ≈ $4000(1.250792)
A ≈ $5003.17
Therefore, Lamar will have $5003.17 in the account after 7 years.
Lamar deposited $4000 into an account with 3.2% interest, compounded semiannually. Assuming that no withdrawals are made, how much will he have in the account after 7 years?
Do not round any intermediate computations, and round your answer to the nearest cent.
1 answer