Answer:
$541.22
Step-by-step explanation:
We are given;
Amount deposited (principal) is $500
Rate of interest is 4%
Time = 2 years
We are required to determine amount in the account after 2 years
Interest periods, n = 4 (since the money was compounded semi-annually)
rate of interest, r = 2%
Using the compound interest formula;
Amount, A = P (1 + r/100)^n
Therefore;
Amount = $500 (1 + 2/100)^4
= $500 × 1.02^4
= $541.22
Therefore, the balance in the account after 2 years is $541.22
