Kyle put $300 of his birthday money in the bank. The bank compounds interest twice a year at 4%. How much money will Kyle have after three years?

Question

Kyle put $300 of his birthday money in the bank. The bank compounds interest twice a year at 4%. How much money will Kyle have after three years?

Answer 1

the underlying compound interest formula that you want to use to solve this one is

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

for this scenario that means

A = 300(1 + 0.04/2)^(2*3)

A = 300(1.02)^6

A = 337.85

meaning that the final balance here is $337.85

Answer 2

300(1 + 0.04/2)³⁽²⁾ = $337.85