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Ashley deposits $1000 into an account that earns 4% interest compounded 2 times per year. how much money will Ashley have in her account after 5 years? round to the nearest cent

A)1520.30

B)1892.19

C)1218.99

D)1253.00

Verified Answer :

Beanie4185

The equation for compound interest is \(A=P(1+\frac{r}{n})^{nt}\), where:
P is the original deposit (or "principal")
r is the rate of the interest (in decimal form)
n is the number of times per year that the interest is compounded
t is the time passed in years

Plugging in your values, we see that the equation becomes \(A=1000(1+\frac{.04}{2})^{(2)(5)}=1000(1.02)^{10}\)

which equals, to the nearest cent, $1218.99, which is answer C.


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