6
QuizMultiple Choice

Personal Savings and Consumer Credit: Part Two — Test

Question 6 • Advanced Financial Algebra

Abdullah invests $2,000 in a savings account with a 3% annual interest rate, compounded semiannually. What will be the total amount after 2.5 years? A=P⁢(1+(r)/(n))^n⁢t

Answer
A
2 dollars comma 154 point 5 7
B
4 dollars comma 022 point 7 1
C
2 dollars comma 318 point 5 5
D
2 dollars comma 075 point 8 5

Explanation

Use the compound-interest formula with P = $2,000, r = 0.03, n = 2, and t = 2.5. There are 2 × 2.5 = 5 compounding periods, so A = 2,000(1 + 0.03/2)^5 = 2,000(1.015)^5 ≈ $2,154.57. The correct choice is A, $2,154.57.

AI-written and checked against the verified answer.

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