Final answer:
To calculate the amount of money that will be in Cameron's account on the day of his retirement, we can use the formula for compound interest. Cameron will contribute a total of $2580 over the 10 years. The interest earned will be approximately $4841.28.
Step-by-step explanation:
To calculate the amount of money that will be in Cameron's account on the day of his retirement, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where A is the final amount, P is the principal (initial deposit), r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, the principal is $129, the interest rate is 9% (or 0.09), the interest is compounded semiannually (so n = 2), and the number of years is 24.
Plugging these values into the formula:
A = 129(1 + 0.09/2)^(2*24)
Solving this equation gives us A ≈ $7421.28. Therefore, there will be approximately $7421.28 in Cameron's account on the day of his retirement.
To calculate how much Cameron will contribute, we can multiply the deposit amount ($129) by the number of deposits made over the 10 years (which is 20, since deposits are made every 6 months).
Cameron will contribute a total of $129 * 20 = $2580 over the 10 years.
The interest earned can be calculated by subtracting the total amount contributed from the final amount in the account:
Interest = A - Total Contribution
Interest = $7421.28 - $2580 = $4841.28. Therefore, the interest earned will be approximately $4841.28.