Jimmy invests $2500 in an account with a 5% interest rate, making no other deposits or withdrawals. What will Jimmy’s account balance be after 8 years if the interest is compounded 6 times each year?
URGENT PLEASE

Answers

Answer 1

Answer:

We conclude that the total amount accrued, principal plus interest,  from compound interest on an original principal of  $2500 at a rate of 5% per year compounded 6 times per year over 8 years is $3723.38.

Step-by-step explanation:

Given

Principle P = $2500

Interest rate r = 5% = 0.05

Time period t = 8 years

To determine

Accrue Amount A = ?

Using the compound interest equation

[tex]A\:=\:P\left(1\:+\:\frac{r}{n}\right)^{nt}[/tex]

where:

A represents the Accrue Amount

P represents the Principal Amount

r represents the interest rate

t represents the time period in years

n represents the number of compounding periods per unit t

Important tip:

Given that the interest is compounded 6 times each year, therefore, the value of n = 6.

now substituting P = 2500, r = 0.05, t = 8 and n = 6 in the equation

[tex]A\:=\:P\left(1\:+\:\frac{r}{n}\right)^{nt}[/tex]

[tex]A=2500\left(1+\frac{0.05}{6}\right)^{\left(6\right)\left(8\right)}[/tex]

[tex]\:A=2500\left(1+\frac{0.05}{6}\right)^{48}[/tex]

[tex]A=2500\times 1.48935[/tex]      ∵  [tex]\left(1+\frac{0.05}{6}\right)^{48\:\:}=1.48935[/tex]

[tex]A=\:3723.38[/tex] $

Therefore, we conclude that the total amount accrued, principal plus interest,  from compound interest on an original principal of  $2500 at a rate of 5% per year compounded 6 times per year over 8 years is $3723.38.


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Step-by-step explanation:

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Answers

Answer:

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