Solve the problem.
-John Leeʹs savings account has a balance of $3856. After 2 years, what will the amount of interest Be at 4% compounded semiannually?
A) $314.65
B) $155.78
C) $317.86
D) $308.48

Question

Quizplus · Accepted Answer

The amount of interest can be calculated using the compound interest formula: A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount ($3856), r is the annual interest rate (4% or 0.04), n is the number of times that interest is compounded per year (semiannually means n=2), and t is the time the money is invested for in years (2 years). To find the interest earned, subtract the principal from the total amount after 2 years. Calculation: A = 3856(1 + 0.04/2)^(2*2) = 3856(1 + 0.02)^4 ≈ 3856 * 1.082856 = 4173.86. Interest = 4173.86 - 3856 = $317.86.

Solve the Problem. -John Leeʹs Savings Account Has a Balance of $3856. After