Answer:
(a)[tex]A(n)=P(1+\frac{r}{24})^{24n}[/tex]
(b)$3763.31
Step-by-step explanation:
When a Principal, P is invested at an annual rate r, for a period of k times over n years, the Amount, A(t) after n years is given by the model:
[tex]A(n)=P(1+\frac{r}{k})^{nk}[/tex]
In this case:
r=1.8%
Since it is compounded bimonthly, k=2X12=24
Therefore:
[tex]A(n)=P(1+\frac{r}{24})^{24n}[/tex]
For P=$2400, and n=25 years
[tex]A(25)=2400(1+\frac{0.018}{24})^{24*25}\\A(25)=\$3763.31[/tex]
The balance in the account after 25 years is $3763.31.
