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When a principal amount, P, is invested at an annual interest rate, r, and compounded n times per

year, the amount accumulated in the account after t years can be found with the equation:

A = P(1 + r/n) ^nt

Javier invested $2,350 in a savings account for 5 years with a rate of 1.75% compounded every six

months. In this situation, what is n?

0.0175

5 6 2

Respuesta :

Answer:

n =2

Step-by-step explanation:

Compound interest:

The compound interest formula is given by:

[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]

Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time in years for which the money is invested or borrowed.

In this question:

The money is compounded every 6 months.

n is the number of times that interest is compounded per year.

Each 6 months means 12/6 = twice a year. So n =2..

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