Three thousand dollars is deposited at 8 percent interest compounded semiannually. What is the amount in the account at the end of 1 year? a. $3,588.00 b. $3,244.80 c. $4,876.90 d. $2,980.55 1000 ot earns 6 percent interest

Answer :

Answer:

the amount in the account at the end of 1 year will be;

[tex]\text{ \$3,}244.80[/tex]

Explanation:

Given that Three thousand dollars is deposited at 8 percent interest compounded semiannually.

[tex]\begin{gathered} \text{ Principal P}=\text{ \$3,000} \\ \text{rate r = 8\% = 0.08} \\ \text{time t= 1 year} \\ \text{ number of times compounded n = 2 (semiannually)} \end{gathered}[/tex]

The future value F of a compound interest can be calculated using the formula;

[tex]F=P(1+\frac{r}{n})^{nt}[/tex]

Substituting the given values into the formula;

[tex]\begin{gathered} F=3,000(1+\frac{0.08}{2})^{2(1)} \\ F=3,000(1+0.04)^2 \\ F=3,000(1.04)^2 \\ F=3,000(1.0816) \\ F=3,244.80 \end{gathered}[/tex]

Therefore, the amount in the account at the end of 1 year will be;

[tex]\text{ \$3,}244.80[/tex]

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