Lois invests 650 every 6 months at 4.6%/a compounded semi-annually for 25 years. How much interest will she earn after the 25th year

Question

Mathematics

Jacquelyn Monroe

29 November, 18:20

Lois invests 650 every 6 months at 4.6%/a compounded semi-annually for 25 years. How much interest will she earn after the 25th year

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Answers (1)

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Audrey · Answer 1

Future value annuity is given by:

FV=P[ ((1+r) ^n-1) / r]

From the information:

P=650

r=0.046/2=0.023

n=25*2=50

Plugging our values in the formula we get:

FV=650[ ((1+0.023) ^50-1) / 0.023]

FV=59837.365