Business Investment A firm of attorneys deposits $5000 of profit-sharing money at the end of each semiannual period for years. Find the final amount in the account if the deposits earn 10% compounded semiannually.
Finance - Lynn, Thursday, June 10, 2010 at 10:46pm
10,000 a year is deposited with the deposits earning 20% a year...
But you do not state how many years the money is deposited?
Finance - Reiny, Thursday, June 10, 2010 at 11:18pm
As Lynn stated, you did not specify how many years.
For simplicity's sake, let's say they did this for 8 years
amount = 5000 [ (1+.05)^16 - 1 ]/.05
notice I divided the rate by 2, since it is compounded semiannually, and doubled the years, because there are 16 half-years in 8 years
Whatever time you need, make the appropriate changes