If Cindy deposits $12,000 into a bank account that pays 6% interest compounded semiannually,what will the account balance be in seven years?
A) 18,151
B) 14,356
C) 16,987
D) 15,555

Question

Quizplus · Accepted Answer

Using the formula A=P(1+r/n)^(n*t), where:
A = final amount
P = principal (initial amount)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = time (in years)

We can substitute the values given in the problem to find the final amount:

A = 12000(1+0.06/2)^(2*7)
A = 12000(1.03)^14
A ≈ 18,151

Therefore, the best choice is A) 18,151 as it is the only answer that matches the calculated value.

If Cindy Deposits $12,000 into a Bank Account That Pays