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# $2000 is deposited into a savings account that earns interest at the SORT BY: Tags: Show Tags Hide Tags Math Expert Joined: 02 Sep 2009 Posts: 94605 Own Kudos [?]: 643508 [1] Given Kudos: 86734 GMAT Club Legend Joined: 08 Jul 2010 Status:GMAT/GRE Tutor l Admission Consultant l On-Demand Course creator Posts: 6027 Own Kudos [?]: 13824 [0] Given Kudos: 125 Location: India GMAT: QUANT+DI EXPERT Schools: IIM (A) ISB '24 GMAT 1: 750 Q51 V41 WE:Education (Education) Board of Directors Joined: 11 Jun 2011 Status:QA & VA Forum Moderator Posts: 6047 Own Kudos [?]: 4768 [0] Given Kudos: 463 Location: India GPA: 3.5 WE:Business Development (Commercial Banking) Target Test Prep Representative Joined: 14 Oct 2015 Status:Founder & CEO Affiliations: Target Test Prep Posts: 19189 Own Kudos [?]: 22708 [0] Given Kudos: 286 Location: United States (CA) Re:$2000 is deposited into a savings account that earns interest at the [#permalink]
Bunuel wrote:
$2000 is deposited into a savings account that earns interest at the rate of 10 percent per year, compounded semiannually. How much money will there be in the account at the end of one year? (A)$2105

(B) $2200 (C)$2205

(D) $2400 (E)$2600

Since the rate is compounded semiannually, each six months, the principal earns 5% interest during each compounding period.

After the first 6 months, the account is worth 1.05 x 2000 = $2100. After the next 6 months, the account is worth 1.05 x 2100 =$2,205.