Given:
Principal = $14850
Rate of interest = 4% compounded semiannually.
Time = 3 years
To find:
The amount after 3 years.
Solution:
Formula for amount is:
[tex]A=P\left(1+\dfrac{r}{n}\right)^{nt}[/tex]
Where, P is principal, r is the rate of interest in decimal, n is the number of times interest compounded and t is the number of years.
The interest is compounded semiannually, so n=2.
Putting [tex]P=14850, r=4, n=2, t=3[/tex] in the above formula, we get
[tex]A=14850\left(1+\dfrac{0.04}{2}\right)^{2(3)}[/tex]
[tex]A=14850\left(1+0.02\right)^{6}[/tex]
[tex]A=14850\left(1.02\right)^{6}[/tex]
On further simplification, we get
[tex]A=14850(1.12616242)[/tex]
[tex]A=16723.511937[/tex]
[tex]A\approx 16723.51[/tex]
Therefore, the amount in the account after three years is $16723.51.
