Answer:
Interest = $63
Balance = $2,063
Step-by-step explanation:
Compound Interest Formula
[tex]\boxed{\sf I=P\left(1+\frac{r}{n}\right)^{nt} -P}[/tex]
where:
- I = Total interest.
- P = Principal amount.
- r = Interest rate (in decimal form).
- n = Number of times interest is applied per year.
- t = Number of time periods (years) elapsed.
Given:
- P = $9,000
- r = 1.4% = 0.014
- n = 2 (semi-annually)
- t = 0.5 (half a year)
Substitute the given values into the formula and solve for I:
[tex]\implies \sf I=9000\left(1+\dfrac{0.014}{2}\right)^{2 \times 0.5}-9000[/tex]
[tex]\implies \sf I=9000\left(1+0.007\right)^{1}-9000[/tex]
[tex]\implies \sf I=9000\left(1.007\right)-9000[/tex]
[tex]\implies \sf I=9063-9000[/tex]
[tex]\implies \sf I=63[/tex]
Therefore, the account earns $63 interest in the first six months.
The balance after six months is $2,063.
