Jessica deposits $300 into a savings account that pays an annual interest rate of 2%, compounded twice a year. How much money will Jessica have in her account at the end of one year?

Question

amistre64 · Answer

it pays 2% interest per year, but it does it in 2 installments; 1% and 1%, it compounds the first result into the second so you receive a little more in the end.

anonymous · Answer

i always forget this formula
is it 300( 1 + .01)^2  ?

amistre64 · Answer

(300(1.01))(1.01) is what im seeing,

anonymous · Answer

yea

amistre64 · Answer

A = P(1+r/2)^2

amistre64 · Answer

well, generically, which is what i meant to type:

A = P(1+r/n)^nt

where P = starting amount, r = rate, n=compounded cycle, and t = years

anonymous · Answer

yes - thats it  - i have trouble remembering that one  - id better make it into a mantra!!

anonymous · Answer

so amount comes to 306.3

anonymous · Answer

sorry 306.03

anonymous · Answer

Thank You guys very much appreciated