Question

Find the compound amount for the deposit. Round to the nearest cent.

$15,000 at 10% compounded semiannually for 10 years.

Answer 1

future value of a single deposit

=> amount deposited*(1+r)^n

here,

amount deposited =15,000

r = 10% per annum =>10% * 6/12 months =>5%

=>0.05....(since we have semi annual compounding).

n = 10 years *2 semi annual periods

=>20 periods

=>$15,000*(1.05)^20

=>$16,537.50.