Little Miss Buffet takes all the money from her piggy bank and puts it into a savings account at her local bank. The bank promises an annual interest rate of 2.5% on the balance, compounded semiannually. How much will she have after one year if her initial deposit was 200?

Solution

Solution

Amount : 205.03

Solution steps

Translate the problem into an equation:

A = 200 (1 + \frac{0.025}{2})^{2 \cdot 1}

200 (1 + \frac{0.025}{2})^{2 \cdot 1} = 205.03125

Round to the nearest hundredth:

205.03

Amount : 205.03

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