Homework SoursePlease round off ONLY the final answer to maintain accuracy
Please round off ONLY the final answer to maintain accuracy
You are going to save money for your son’s education. You have decided to place $1,639 every half year at the end of the period into a saving account earning 4.34 percent per year, compounded semi-annually for the next 8 years. How much money will be in the account at the end of that time period?
Round the answer to two decimal places.
Solution
Solution:
Half yearly investment = $1,639
Rate of interest = 4.34%
Nos of years = 8
Nos of period = 8*2 =16
Therefore at the end of period, money will be $30,956.29 in the account.
| Computation of future value of investment | ||||
| Period | Opening Balance | Investment | Interest | Closing Balance |
| 1 | $0.00 | $1,639.00 | $0.00 | $1,639.00 |
| 2 | $1,639.00 | $1,639.00 | $35.57 | $3,313.57 |
| 3 | $3,313.57 | $1,639.00 | $71.90 | $5,024.47 |
| 4 | $5,024.47 | $1,639.00 | $109.03 | $6,772.50 |
| 5 | $6,772.50 | $1,639.00 | $146.96 | $8,558.46 |
| 6 | $8,558.46 | $1,639.00 | $185.72 | $10,383.18 |
| 7 | $10,383.18 | $1,639.00 | $225.32 | $12,247.50 |
| 8 | $12,247.50 | $1,639.00 | $265.77 | $14,152.27 |
| 9 | $14,152.27 | $1,639.00 | $307.10 | $16,098.37 |
| 10 | $16,098.37 | $1,639.00 | $349.33 | $18,086.71 |
| 11 | $18,086.71 | $1,639.00 | $392.48 | $20,118.19 |
| 12 | $20,118.19 | $1,639.00 | $436.56 | $22,193.75 |
| 13 | $22,193.75 | $1,639.00 | $481.60 | $24,314.36 |
| 14 | $24,314.36 | $1,639.00 | $527.62 | $26,480.98 |
| 15 | $26,480.98 | $1,639.00 | $574.64 | $28,694.62 |
| 16 | $28,694.62 | $1,639.00 | $622.67 | $30,956.29 |
