Suppose that
Do not round any intermediate computations, and round your answer to the nearest cent.
Round the final result to the nearest cent:
Step 1 :Given that the principal amount (P) is $2000, the annual interest rate (r) is 3.1% or 0.031 in decimal, the number of times that interest is compounded per year (n) is 2 (since it's compounded semiannually), and the time the money is invested for in years (t) is 5 years.
Step 2 :We can use the formula for compound interest to find the total amount (A) after 5 years. The formula is
Step 3 :Substitute the given values into the formula:
Step 4 :Calculate the value inside the parentheses:
Step 5 :Raise the result to the power of 10 (2 times 5 years):
Step 6 :Multiply the result by the principal amount:
Step 7 :Round the final result to the nearest cent: