Answer:
$1,050.625
Explanation:
the applicable formula is
A = P x ( 1 + r) ^n
where A= amount after one year
r = interest rate; 5 %
n = number of period
Since interest is compounded twice as year, the applicable interest rate is for 6 months
r =5% /2 = 2.5 % or 0.025
n = i year or 2 periods
A= $1000 x ( 1 + 0.025) ^2
A = $1000 x ( 1.025)^2
A= $1000 x 1.050625
A=$1,050.625
The amount after one year will be $1,050.625
