investments 5 years interest

Question

Heather invests $4,900 in an account with a 3.5% interest rate, making no other deposits or withdrawals. What will Heather's account balance be after 5 years if the interest is compounded 2 times each year? I have to show my work.. not sure how to compound it 2 times a year.

Answer 1

A = Amount after time

P = Principal or Initial Amount

r = Annual Interest Rate

n = Number of times compounded per year

t = Time

P = $4900, r = 3.5% or 0.035, n = 2, t = 5

Answer 2

The equation for compounded interest is:

A = A₀(1 + r/n)^nt where "A" is the amount after "t" years, "r" is the annual interest rate (as a decimal), and "n" is the number of compounding periods per year.

A₀ = 4900

r = 0.035

n = 2

t = 5

So:

A = 4900(1 + 0.035/2)^2*5

A = 4900(1 + 0.0175)¹⁰

A = 4900(1.0175)¹⁰

A = 4900(1.18944449)

A = $5828.28