Mary Lou received $5,000 from her grandparents for her college education 8 years prior to her enrolling in college. Mary Lou invested the money at 5.5% compounded semiannually. How much money would she have in her savings account when she is ready to enroll in college? A: The balance in her account would be $__________ when she is ready to enroll in college. (Round your answer to the nearest cent.)

The total amount , principal plus interest, with compound interest on a principal of $5,000.00 at a rate of 5.5% per year compounded 2 times per year over 8 years is $7,717.55.

Step-by-step explanation:

Compound interest is based on the principal amount and the interest that accumulates on it in every period.

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest.

First, convert R as a percent to r as a decimal

r = R/100

r = 5.5/100

r = 0.055 rate per year,

Then solve the equation for A

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

A = 5,000.00(1 + 0.055/2)^(2)(8)

A = 5,000.00(1 + 0.0275)^(16)

A = $7,717.55

The total amount accrued, principal plus interest, with compound interest on a principal of $5,000.00 at a rate of 5.5% per year compounded 2 times per year over 8 years is $7,717.55.

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