Question

Samantha deposits $1000 into a new savings account. The new savings account pays 3% interest,
compounded semiannually (twice per year). She does not deposit money into or withdraw money from the
account for 1 1/2 years.

Write an equation that can be used to determine the amount of money, in dollars, in the new savings account at
the end of 1 1/2 years.
A=?

Part D
Use the equation you wrote in Part C to determine the amount of money, in dollars, in Samantha's new savings
account at the end of 1 1/2 years. Round your answer to the nearest cent.

Answer 1

Answer:

Step-by-step explanation:

If the pincipal is represented as P = $1000

and the interest rate is represented by r = 3%; also 0.03

while t is represented as the number of years = 1.5

n is the number of times interest is compounded = 2 for semi annually

Let the Accrued Amount be A.

From the compouded interest formula,

A = P(1 + r/n)^nt

At the end of the 1.5 years, the equation for accrued amount is therefore

A = 1000(1 + 0.03/2)^(2*1.5)

A = 1000(1 + 0.015)^3

Part D

Samantha's new savings account value will be

A = 1000 x 1.015^3

A = 1000 x 1.04568

= $1045. 68