Question
You deposit $10,000 in an account earning 3% interest, compounded semi-monthly (twice a month). You plan to leave the account untouched for 25 years. How much interest will you earn over the 25 years?
Answers
Damon
compounds 24 times a year
so r = .03/24 = 0.00125 per period
25 years = 25*24 = 600 periods
A = 10,000 * 1.00125^600
= 10,000 * 2.116008731
= $21,160.09
so r = .03/24 = 0.00125 per period
25 years = 25*24 = 600 periods
A = 10,000 * 1.00125^600
= 10,000 * 2.116008731
= $21,160.09