Amishi deposited $600, at the end of each six months for 18 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.)

Respuesta :

Answer:

$46,558.99

Step-by-step explanation:

To find the future value of the account where equal payments are made at the end of each period for a specified number of periods, we can use the Future Value of an Ordinary Annuity formula:

[tex]FV=PMT\left[\dfrac{\left(\left(1+\dfrac{r}{t}\right)^{nt}-1\right)}{\dfrac{r}{t}}\right][/tex]

where:

  • FV = Future Value
  • PMT = Payment Amount
  • r = interest rate per year (decimal form)
  • n = number of times interest is applied per year
  • t = time in years

In this case:

  • PMT = $600
  • r = 8% = 0.08
  • n = 2 (semi-annually)
  • t = 18 years

Substitute the given values into the formula and solve for FV:

[tex]FV=600\left[\dfrac{\left(\left(1+\dfrac{0.08}{2}\right)^{2 \cdot 18}-1\right)}{\dfrac{0.08}{2}}\right]\\\\\\\\FV=600\left[\dfrac{\left(\left(1.04\right)^{36}-1\right)}{0.04}\right]\\\\\\\\FV=46558.98830...\\\\\\FV=\$46,558.99\; \sf (nearest\;cent)[/tex]

Therefore, the future value of the account rounded to the nearest cent is:

[tex]\Large\boxed{\boxed{\$46,558.99}}[/tex]

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