Sam Monte deposits $21,500 into Legal Bank, which pays 6% interest that is compounded semiannually. What will Sam have in his account at the end of six years?

Question

Quizplus · Accepted Answer

The formula for compound interest is: 
A = P(1 + r/n)^(nt)
Where:
A = the amount of money at the end of the investment
P = the principal (initial amount)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the time (in years)

In this problem, P = $21,500, r = 0.06, n = 2 (since interest is compounded semiannually), and t = 6.

Plugging these values into the formula, we get:
A = $21,500(1 + 0.06/2)^(2*6)
A = $30,653.86

Therefore, Sam will have $30,653.86 in his account at the end of six years.

Sam Monte Deposits $21,500 into Legal Bank, Which Pays 6