Question

e can deposit $5,000 at the end of each six-month period for the next 12 years and earn annual interest of 8.5%, compounded semi-annually. What will the value of the investment be after 12 years

Answer 1

$201,805.67

Step-by-step explanation:

The formula for calculating future value = A (B / r)

B = [(1 + r)^n] - 1

A = amount

R = interest rate = 8.5 / 2 = 4.25%

N = number of years = 12 x 2 = 24

(1.0425^24 - 1 ) / 0.0425 = 40.361134

40.361134 x $5,000 = $201,805.67