Answer: A = $3111
Step-by-step explanation:
The question is about compound interest and it is specified in particular that it is compounded semiannually. To start, the formula for compound interest should be used.
A = P (1+ r/n)^(nt)
Where:
A = Compounded Amount, $
P = Principal, $
r = Interest Rate
n = Number of times the interest is applied per year
t = Number of periods elapsed, year
Substituting in the equation,
A = $2000 [1 + (0.075/20]^[(2)(6)]
A = $3110.91
A = $3111