Question

Walter works for SCI Energy. His retirement plan contributions are $4,200 at the beginningof each 6-month period.Assume that the account grows at 5% semiannually for 15 years. Find the interestearned.

Answer 1

Given:

Principal = P = $4,200

Time = t = 15 years

Rate = r = 5% = 0.05

semiannually , n = 2

So, the total amount = A

$\begin{gathered} A=P\cdot(1+\frac{r}{n})^{nt}=4200\cdot(1+\frac{0.05}{2})^{2\cdot15} \\ \\ A=4200\cdot1.025^{30}=8809.78 \end{gathered}$

The interest earned = A - P = 8809.78 - 4200 = 4609.78

so, the answer will be The interest earned = $4,609.78