question archive Mary deposited $200, at the end of each six months for 19 years in a savings account
Mary deposited $200, at the end of each six months for 19 years in a savings account
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Mary deposited $200, at the end of each six months for 19 years in a savings account. If the account paid 8% interest, compounded semiannually, use the appropriate formula to find the future value of her account. (Round your answer to the nearest cent.)
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We shall use the formula
FV = pmt((1+i)n - 1)/i
Where FV is the future value, pmt is the periodic deposit, i the periodic interest rate, n the number of deposits.
pmt = 200, i = 8%/2=0.08/2=0.04, n = 19x2=38
Substituting we get;
FV = 200((1+0.04)38-1)/0.04
= 200((1.04)38 - 1)/0.04
= 17194.06725
= $17,194.07
