Tamira invests $5,000 in an account that pays 4% annual interest. How much will there be in the account after 5 years if the interest is compounded semi-annually?

College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter9: Sequences, Probability And Counting Theory
Section9.4: Series And Their Notations
Problem 62SE: Rachael deposits $1500 into a retirement fund each year. The fund earns 8.2% annual interest,...
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Look at the difference in values based on annual, semi-annual, quarterly, and monthly
compounding.
Tamira invests $5,000 in an account that pays 4% annual interest. How much will there be in
the account after 5 years if the interest is compounded semi-annually?
Compound Interest Formula
3(1)
A = 5000 (1+ 004)
Amount After 3 Years ($)
Annually
5,624.32
3(2)
A = 5000 (1+ 0.04)
Semi-Annually
5,630.81
3(4)
Quarterly
A = 5000 (1
0.04
+1
5,634.13
%3D
3(12)
Monthly
A = 5000 (1 + 0.04)
5,636.36
%3D
12
O 5520.40
O 26010.00
O 6094.97
Transcribed Image Text:Look at the difference in values based on annual, semi-annual, quarterly, and monthly compounding. Tamira invests $5,000 in an account that pays 4% annual interest. How much will there be in the account after 5 years if the interest is compounded semi-annually? Compound Interest Formula 3(1) A = 5000 (1+ 004) Amount After 3 Years ($) Annually 5,624.32 3(2) A = 5000 (1+ 0.04) Semi-Annually 5,630.81 3(4) Quarterly A = 5000 (1 0.04 +1 5,634.13 %3D 3(12) Monthly A = 5000 (1 + 0.04) 5,636.36 %3D 12 O 5520.40 O 26010.00 O 6094.97
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