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Re: $2000 is deposited into a savings account that earns interest at the [#permalink]
Expert Reply
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.

Answer: C
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Re: $2000 is deposited into a savings account that earns interest at the [#permalink]
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