Question

If you invest $750 every six months at 8 percent compounded semi-annually, how much would you accumulate at the end of 10 years?

Answer 1

FV= $22,333.56

Step-by-step explanation:

Giving the following information:

Semi-annual investment= $750

Interest rate= 0.08/2= 0.04

Number of periods= 10*2= 20

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= semi-annual deposit

FV= {750*[(1.04^20) - 1]} / 0.04

FV= $22,333.56