Solve the problem. When needed, use 365 days per year and 30 days per month.
-An initial investment of $14,000 is appreciated for 3 years in an account that earns 14% interest, compounded semiannually. Find the amount of money in the account at the end of the period.
A) $19,635.72
B) $21,010.22
C) $7010.22
D) $20,741.62

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where P is the principal amount ($14,000), r is the annual interest rate (0.14), n is the number of times interest is compounded per year (2 for semiannually), and t is the time in years (3). Plugging in these values gives A = 14000(1 + 0.14/2)^(2*3) = 14000(1.07)^6 ≈ $21,010.22.

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