Question
Mary has a savings account and is earning 10% annual interest compounded semi-annually. If she deposits $2,000 in the account every six months for three years, what will the future value of her account be? How much interest will she have earned?
Answers
Steve
so, at 5% per period, after 6 periods, the account will have
2000*1.05^6 + 2000*1.05^5 + ... + 2000
= 2000(1.05^7 - 1)/0.05 = 16284.02
2000*1.05^6 + 2000*1.05^5 + ... + 2000
= 2000(1.05^7 - 1)/0.05 = 16284.02