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Finance

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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 -

    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 -

    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
    = 118287.46

    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

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