Homework Help: Consumer math

Posted by Cosumer math on Monday, April 9, 2012 at 10:21am.

When Greg was born, his grandmother put $5000 in a savings account for his college expenses. It was compounded at 2.5 percent semiannually, and left in the account 18 years. How much was in the account? Round to the nearest dollar.

Consumer math - Piwo, Monday, April 9, 2012 at 11:27am
Use the formula:
A=P(1+i)^n
A=?
P=$5000
i=2.5/2
=1.25/100
=0.0125
n=2*18=36
now we substitute:
A=5000(1+0.0125)^36
=5000(1.0125)^36
=$7819.72

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