If $975 is invested in an account that earns annual interest of 8.5%, compounded semiannually, what will the account balance be after 7 years? (Round your answer to the nearest cent.)

If $975 is invested in an account that earns annual interest of 8.5%, compounded semiannually, what will the account balance be after 7 years? (Round your answer to the nearest cent.)

Given an annual interest rate of 8.5%, that's equivalent to 4.25% being paid every 6 months (half the interest in half a year). Over 7 years there are 14 half-year periods. So use the formula for compount interest:

FV = PV(1+i)^n

where PV = present value = $975, I = 0.0425, and n = 14.