SOLUTION: The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate Prinicpal: $10,000 Rate: 7% Compounded: semiannually Ti

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Question 1175021: The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate
Prinicpal: $10,000 Rate: 7% Compounded: semiannually Time: 2 years

A. Find how much money there will be in the account after the given number of years
B. Find the interest earned
Answer by MathLover1(20849) About Me  (Show Source):
You can put this solution on YOUR website!

The formula for compound interest is :
A=P%281%2Br%2Fn%29%5E%28nt%29
given:
P=10000
R=7% =>r=0.07
n=2 (semiannually)
t=2 years

A. Find how much money there will be in the account after the given number of years.
A=10000%281%2B0.07%2F2%29%5E%282%2A2%29
A=10000%281%2B0.035%29%5E4
A=10000%281.035%29%5E4
A=10000%2A1.147523000625
A=11475.23

B. Find the interest earned.
I=A-P
I=11475.23-10000
I=1475.23