+598 Claude made semi-annual deposits of $3100 at the beginning of a six-month period into a fund earning 6.8% compounded semi-annually for nine years. No further deposits were made.
(a) How much will be in the account 15 years after the first deposit?
(b) How much in total was deposited?
(c) How much interest will have been earned?
Any help would be greatly appreciated with steps. Thanks
Claude made semi-annual deposits of $3100 at the beginning of a six-month period into a fund earning 6.8% compounded semi-annually for nine years. No further deposits were made.
(a) How much will be in the account 15 years after the first deposit?
(b) How much in total was deposited?
(c) How much interest will have been earned?
Any help would be greatly appreciated with steps. Thanks
Claude should have accumulated a total of $77,820.42 after the 1st. nine years.
Here is the formula used to calculate this, if you wish to verify the result:
FV=P{[1 + R]^N - 1/ R}=FV OF $1 PER PERIOD.Where R=Interest rate per period, N=number of periods, P=periodic payment.
(a) Now, we have to find the FV of the above amount for another 6 years, which comes to $116,235.83. The formula for this is the common:FV=PV[1 + R]^N=FV OF $1 TODAY.
(b) $3,100 X 18=$55,800 was deposited in total.
(c) over the 1st. nine years=$77,820.42 - $55,800=$22,020.42 interest earned.
over the entire 15 years=$116,235.83 - $55,800=$60,435.83 interest earned.
P.S. You have to remember to set your calculations to the beginning of the period.
