Math

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If you deposit $900 semiannually in a bank which pays 6% interest compounded semiannually and make no more deposits after 7 years, what is the balance in the account 8 yrs. later from the last deposit?

  • Math -

    will assume you are making 14 deposits, the first one 6 months from now, and then leave the balance alone for another year.

    Amount at the last deposit
    = 900[ 1.03^14 - 1]/.03 = 15377.69

    Value at the end of 8 years = 15377.69(1.03)^2 = 16314.19

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