Lisa richter deposited $5,000 at 4% compounded semiannually for three years. at the beginning of the fourth year, lisa deposited $2,500. what would her balance be at the end of five years assuming she is still earning 4% compounded semiannually?

$8,801.05

Step-by-step explanation:

Lisa Richter deposited $5,000 at 4% compounded semiannually for three years.

To calculate the amount after 3 years we use the formula

Where A = Future amount

           P = Principal amount ($5,000)

           r = rate of interest 4% (0.04)

           n = number of compounding interest semiannually (2)

           t = time (3 years)

Now put the values in the formula

A = 5000(1.126)

A = $5,630.81

At the beginning of the fourth year Lisa deposited $2,500. Now the amount would be

New principal amount = 5630.81 + 2500 = 8,130.81

we have to calculate the future amount at the end of five years or for 2 more years.

We will use the same method as we done above.

A = 8130.81 (1.08243)

A = $8,801.05

Lisa's balance at the end of five years $8,801.05

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