Answer: $7100.13 available
Step-by-step explanation:
To calculate the amount of money available when Melissa's $5000 CD matures on her 13th birthday, earning 5% interest compounded semiannually, we can use the formula for compound interest:
A = P ( 1 + r / n) nt
is A the total amount available
- is P the principal amount (initial investment), which is $5000
- is r the annual interest rate in decimal form, which is 5% or 0.05
- is n the number of times the interest is compounded per year, which is 2 for semiannual compounding
- is t the number of years the money is invested for, from Melissa's 6th to 13th birthday, which is 7 years
