Answered

Westonci.ca is the ultimate Q&A platform, offering detailed and reliable answers from a knowledgeable community. Experience the convenience of finding accurate answers to your questions from knowledgeable professionals on our platform. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

Tracy invests 500 into an ETF which earns 8% per year.In 5years how much will Tracy’s investment be worth if interest is compounded semiannually (twice a year)? Round to the nearest dollar

Sagot :

marcthemathtutor

Answer:

$740

Step-by-step explanation:

(see attached picture for reference)

I'm going to assume that when you wrote "500", you mean "$500"

recall that the formula for compound interest:

A=P(1+r/n) ^ (nt)

where

P = principal amount = $500

r = interest rate = 8% = 0.08

n = number of times compounded in a year = 2 (note: semi-annually means twice a year, hence n = 2)

t = number of years = 5

substituting this into the equation,

A=P(1+r/n) ^ (nt)

A=500 [ 1+(0.08/2) ] ^ (2 x 5)

A= $740.1221

A = $740 (rounded to nearest dollar)

View image marcthemathtutor
Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.