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Assume Vaughn Manufacturing deposits $99000 with First National Bank in an account earning interest at 6% per annum, compounded semi-annually. How much will Vaughn have in the account after 5 years if interest is reinvested?

Answer :

Answer:

amount = $133047.72

Explanation:

given data

deposits principal = $99000

earning interest rate = 6% = 0.06

time = 5 year

solution

we will get here amount for compounded semi-annually that is express as

amount = principal × [tex](1+ \frac{r}{n})^{nt}[/tex]   ........................1

here n is 2 for semi annually

so put here value in equation 1 we get

amount = $99000 × [tex](1+ \frac{0.06}{2})^{2\times 5}[/tex]  

solve it we get

amount = $133047.72

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