The equation for compound interest is [tex]A=P(1+\frac{r}{n})^{nt}[/tex], where:
P is the original deposit (or "principal")
r is the rate of the interest (in decimal form)
n is the number of times per year that the interest is compounded
t is the time passed in years
Plugging in your values, we see that the equation becomes [tex]A=1000(1+\frac{.04}{2})^{(2)(5)}=1000(1.02)^{10}[/tex]
which equals, to the nearest cent, $1218.99, which is answer C.
