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Martha invests 7800 in a new savings account which earns 5.1% annual interest, compounded semi-annually. What will be the value of her investment after 5 years? Round to the nearest cent.

Solution

Solution

Amount : 10033.47

Solution steps

Translate the problem into an equation:

A = 7800 (1 + \frac{0.051}{2})^{2 \cdot 5}

7800 (1 + \frac{0.051}{2})^{2 \cdot 5} = 10033.47215 \dots

Round to the nearest hundredth:

10033.47

Amount : 10033.47

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