Angela decided to save $100 from each paycheck to put toward a car. Twenty-six paychecks, one every other week

Question

Angela decided to save $100 from each paycheck to put toward a car. Twenty-six paychecks, one every other week, are deposited into a money market account with an annual interest rate of 7.5 percent. Determine the future value of the account after 4 years. Submit your answer in exact change.

GPT-5 mini · Answer

There are 26 paychecks per year, so deposits are made every period with periodic rate i = 0.075/26 and n = 26·4 = 104 deposits. The future value of an ordinary annuity of $100 each period is

FV = 100 * [((1 + 0.075/26)^{104} − 1) / (0.075/26)]
   = (104000/3) * ((1043/1040)^{104} − 1)

Numerically,
FV ≈ $12,108.23.

Angela decided to save $100 from each paycheck to put toward a car. Twenty-six paychecks, one every other week, are deposited into a money market account with an annual interest rate of 7.5 percent. Determine the future value of the account after 4 years. Submit your answer in exact change.

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