Kristen invests $5,000 in a bank. The bank pays 6.45% interest compounded semi-annually. How much money will she have after 2 years, if she makes no additional contributions or withdrawals to the account?

a:5665.80

b:5327.70

c:4375.80

d:5676.88

D. $5,676.88

Step-by-step explanation:

A=P (1+r/n) ^n*t

Where

P=principal=$5000

r=interest rate=6.45%=0.0645

n=periods=2 (semiannually)

t=time=2 years

A=P (1+r/n) ^n*t

=5,000 (1+0.0645/2) ^2*2

=5,000 (1+0.03225) ^4

=5000 (1.03225) ^4

=5000 (1.13553756247925)

=5,676.8781

Approximately

$5,676.88