Answer:
Option B.) $8,123.79
Step-by-step explanation:
we know that
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
[tex]t=5\ years\\ P=\$7,000\\ r=0.03\\n=2[/tex]
substitute in the formula above
[tex]A=\$7,000(1+\frac{0.03}{2})^{2*5}[/tex]
[tex]A=\$7,000(1.015)^{10}=\$8,123.79[/tex]
The worth of the investment after 5 years at an interest of 3% is $8,123.79.
As the function for interest is already given to us, also,
The principal amount, P = $7,000
The rate of Interest, r = 3%
Time period, t = 5 years
Compounded semiannually, n = 2
Substitute the values,
[tex]A=P(1+\dfrac{r}{n})^{nt}[/tex]
[tex]=7000(1+\dfrac{0.03}{2})^{2 \times 5}\\\\=\$ 8,123.79[/tex]
Hence, the worth of the investment after 5 years at an interest of 3% is $8,123.79.
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