Answer:
She would have $1,126.16 in 3 years.
Step-by-step explanation:
Compound interest:
The compound interest formula is given by:
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit year and t is the time in years for which the money is invested or borrowed.
In this question:
Invested 1000, which means that [tex]P = 1000[/tex].
Interest of 4%, so [tex]r = 0.04[/tex]
Semianually is twice a year, so [tex]n = 2[/tex]
How much money would she have in 3 years?
This is A(3).
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]A(3) = 1000(1 + \frac{0.04}{2})^{6} = 1,126.16[/tex]
She would have $1,126.16 in 3 years.
