Compound interest formula is :
[tex]A=p(1+\frac{r}{n} )^{nt}[/tex]
1.
A = 3634.51
p = 2564.65
r = ?
n = 2
t = 13
Putting the values in formula, we get
[tex]3634.51=2564.65(1+\frac{r}{2} )^{2*13}[/tex]
=> [tex]3634.51=2564.65(1+\frac{r}{2} )^{26}[/tex]
=> [tex]\frac{3634.51}{2564.65}=(\frac{2+r}{2} )^{26}[/tex]
=> [tex]1.417=(\frac{2+r}{2} )^{26}[/tex]
We get [tex]\sqrt[26]{1.417}=\frac{2+r}{2}[/tex]
We get r = 0.02699 and r = -4.02699 (neglecting the negative value)
We get r = 0.027 (rounded)
And in percentage, it is 2.7%.
So, option C is the answer.
2.
p = 2651.43
r = 2.8% or 0.028
n = 2
t = 18
Putting the values in formula we get;
[tex]A=2651.43(1+\frac{0.028}{2} )^{2*18}[/tex]
=> [tex]A=2651.43(1.014)^{36}[/tex]
A = $4373.67
So, interest earned = [tex]4373.67-2651.43=1722.24[/tex] dollars
Hence, option D. $1,722.25 is the answer.
