Your investment account pays interest at a rate of 8% compounded semi-annually.If you deposit $1,000 today, how much will you have in two years?
A)$1,081.60
B)$1,166.40
C)$1,169.86
D)$1,360.49

Question

Quizplus · Accepted Answer

We can use the formula:

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

where
A = final amount
P = principal (initial amount)
r = annual interest rate (as a decimal)
n = number of times compounded per year
t = time in years

Using this formula, we can plug in the given values:

A = 1000(1 + 0.08/2)^(2*2)
A = 1169.858

Therefore, the answer is C: $1,169.86.

Your Investment Account Pays Interest at a Rate of 8