Question

Can someone help me solve this please? Karen Gaines invested $14,000 in a money market account with an interest rate of 1.75% compounded semiannually. Six years later, Karen withdrew the full amount to put toward the down payment on a new house. How much did Karen withdraw from the account?

Answer 1

Answer:

Given that,

Karen Gaines invested $14,000 in a money market account with an interest rate of 1.75% compounded semiannually.

Six years later, Karen withdrew the full amount to put toward the down payment on a new house.

To find the amount withdraw.

we know that, formula for finding amount of compound interest as,

$A=P(1+\frac{r}{100})^n$

where P is the principal, nis the number of years, r is the rate of interest per annum.

Given that, interest rate of 1.75% compounded semiannually, therefore number of years is 6x2=12 years.

Substitute the values we get,

$A=14000\times(1+\frac{1.75}{100})^{12}$$=14000(1.0175)^{12^{}}$$=14000(1.2314)$$=17240.15$

Karen withdraws $17,240.15 from the account.