Can you please help me work this problem out in detail? Carol is depositing $250 into an account every six months earning 6%, compounded semiannually. How much money will be in the account after 5 years?
Can you please help me work this problem out in detail? Carol is depositing $250 into an account every six months earning 6%, compounded semiannually. How much money will be in the account after 5 years?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 25P
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Can you please help me work this problem out in detail?
Carol is depositing $250 into an account every six months earning 6%, compounded semiannually. How much money will be in the account after 5 years?
Expert Solution
Step 1
The amount deposited every six months is $250.
The total number of deposits in 5 years would be 10.
The interest rate is 6%, compounded semi-annually. Interest per semi-annual is (6% ÷ 2) = 3%.
The below expression can be used to calculate accumulated value:
Step 2
The accumulated value is:
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