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shirt starled to deposit 18,000 semi annually a fund that 5% compounded semi annually. how much will be in the fund after 10 years

User Dus
by
8.0k points

1 Answer

1 vote

Answer:

To calculate the future value of a deposit compounded semi-annually, you can use the formula for compound interest:

=

(

1

+

)

A=P(1+

n

r

)

nt

Where:

A is the future value of the deposit.

P is the initial deposit amount ($18,000 in this case).

r is the annual interest rate (5% or 0.05 as a decimal).

n is the number of times the interest is compounded per year (semi-annually means 2 times per year).

t is the number of years the money is invested (10 years in this case).

Now, plug in the values and calculate:

=

18

,

000

(

1

+

0.05

2

)

2

10

A=18,000(1+

2

0.05

)

2⋅10

=

18

,

000

(

1

+

0.025

)

20

A=18,000(1+0.025)

20

=

18

,

000

×

1.02

5

20

A=18,000×1.025

20

Using a calculator, you can find that

1.02

5

20

1.282037

1.025

20

≈1.282037.

Now, multiply:

18

,

000

×

1.282037

23

,

076.67

A≈18,000×1.282037≈23,076.67

So, there will be approximately $23,076.67 in the fund after 10 years.

User Stay
by
8.5k points

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