Problem

Find the compound amount for the deposit. Round to the nearest cent. $4500 at 5.8% compounded semiannually for 6 years

Answer

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Answer

Round the compound amount to the nearest cent to get the final answer: 6341.57.

Steps

Step 1 :Given that the principal amount (P) is $4500, the annual interest rate (r) is 5.8%, 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 6.

Step 2 :We can convert the annual interest rate from percentage to decimal by dividing it by 100. So, r=5.8100=0.058.

Step 3 :We can use the compound interest formula A=P(1+rn)nt to find the compound amount (A).

Step 4 :Substitute the given values into the formula: A=4500(1+0.0582)26.

Step 5 :Calculate the expression to get the compound amount: A=6341.573216045244.

Step 6 :Round the compound amount to the nearest cent to get the final answer: 6341.57.

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