Question

Ivan invests $5,000 into an account with a 3.5% interest that is compounded semi-annually.
How much money will he have in this account if he keeps it for 15 years?

Answer 1

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Answer:

  $8414

Step-by-step explanation:

The compound interest formula is useful for this.

  A = P(1 +r/n)^(nt)

where P is the principal invested at annual rate r compounded n times per year for t years. A is the ending balance.

  A = $5000(1 +0.035/2)^(2·15) = $5000·1.0175^30 ≈ $8414.00

Ivan will have $8414 in his account after 15 years.