Gracie shay wants to buy a new hummer in 5 years. gracie estimates the cost of the hummer will be $28,000. if she invests $12,000 now, at a rate of 6 percent compounded semiannually, she:
1.will have enough money
2.will have exactly $16,000
3.will have $18,000
4.will have $16,126.80
5.none of these

Option 4 - She will have $16,126.80

Step-by-step explanation:

Given : Gracie Shay wants to buy a new Hummer in 5 years. Gracie estimates the cost of the Hummer will be $28,000. If she invests $12,000 now, at a rate of 6 percent compounded semiannually.

To find : Which option she will have ?

Solution :

Using compound interest formula,

Where, A is the amount  

P is the principle P=12,000    

Compounded semiannually,

r is the rate 6%=0.06

t is the time 5 years

Substitute the value,

The amount she will have $16126.99.

Therefore, Option 4 is correct.