735 at 7% for 2 1/2 years?

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735 at 7% for 2 1/2 years?

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Answer 1 · 2018-01-25T15:34:44

$A \approx 873.95$ $A ~~ color(red)(873.95)$

Explanation:

Assumed that interest is compounded half yearly.

Formula for total amount is

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

P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n = number of times the interest is compounded per year

Given : P = 735, r = 0.07, t = 5/2, n = 2

$A = 735 \cdot {(1 + (\frac{0.07}{2}))}^{2 \cdot (\frac{5}{2})}$ $A = 735 * (1 +( 0.07/2))^(2 * (5/2))$

$A = 735 \cdot {(\frac{2.07}{2})}^{5} \approx 872.95$ $A = 735 * (2.07/2)^5 ~~ color (red)(872.95)$

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735 at 7% for 2 1/2 years?

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