3.3% with interest compounded semi- A bank features a savings account that has a

Question

3.3% with interest compounded semi- A bank features a savings account that has an annual percentage rate or annually. Destiny deposits $7,500 into the account. The account balance can be modeled by the exponential formula S(t) = P(1 + n) , where S is the future value, P is the present value, r is the annual percentage rate, n is the number of times each year that the interest is compounded, and t is the time in years. (A) What values should be used for P, r, and n? (B) How much money will Destiny have in the account in 7 years? Answer S Round answer to the nearest penny

Explanation / Answer

A). Since Destiny deposits $ 7500 into the account, hence P = $ 7500. Further, r = 3.3/100 = 0.033 and n = 2 ( the interest is compounded 2 times per year).

(B). The amount of money that Destiny will have in the account in 7 years is 7500(1+0.033/2)2*7 = 7500(1.0165)14 = 7500(1.257486588) = $ 9431.15 ( on rounding off to the nearest penny).

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.