Answer
(a) After four years, there will be \$3655.21 in the account.
(b) The interest earned is \$655.21
Work Step by Step
(a) We can use this formula:
$A = P~(1+\frac{r}{n})^{nt}$
$A$ is the final amount in the account
$P$ is the principal (the amount of money invested)
$r$ is the interest rate
$n$ is the number of times per year the interest is compounded
$t$ is the number of years
$A = P~(1+\frac{r}{n})^{nt}$
$A = (\$3,000)~(1+\frac{0.05}{2})^{(2)(4)}$
$A = \$3655.21$
After four years, there will be \$3655.21 in the account.
(b) We can find the interest earned.
$A - P = \$3655.21 - \$3000 = \$655.21$
The interest earned is \$655.21
