## Intermediate Algebra (6th Edition)

We are given that a principal of 25000 dollars is invested in an accounting paying an annual percentage rate of 5%. Also, we know that the account is compounded semiannually (or 2 times per year). We can calculate the amount in the account in 2 years by using the formula $A=P(1+\frac{r}{n})^{nt}$. A= amount in the account after t years P= principal or amount invested t= time in years r= annual rate of interest n= number of times compounded per year $A=25000\times(1+\frac{.05}{2})^{2\times2}=25000\times(1.025)^{4}=27595.32$ dollars