SOLUTION: John Lee's savings account has a balance of $4494. After 3 years, what will the amount of interest be at 5% compounded semiannually?

Algebra ->  Customizable Word Problem Solvers  -> Numbers -> SOLUTION: John Lee's savings account has a balance of $4494. After 3 years, what will the amount of interest be at 5% compounded semiannually?      Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 185407: John Lee's savings account has a balance of $4494. After 3 years, what will the amount of interest be at 5% compounded semiannually?
Answer by jojo14344(1513) About Me  (Show Source):
You can put this solution on YOUR website!

Let's see how much money you got after 3 years:
F=P%281%2Bi%2Fm%29%5E%28mn%29
where
Substituting:
F=4494%281%2B%280.05%2F2%29%29%5E%282%2A3%29
F=4494%281%2B0.025%29%5E6
F=4494%281.025%29%5E6=4494%281.15969%29
F=5211.65,
Therefore, Amount of Interest = F-P=5211.65-4494.00=$717.65, ANSWER
Thank you,
Jojo