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sydnoelle

  • 2 years ago

Marcus wants to purchase a home in six years. He will contribute $2500 each year to a savings account with 2.64% interest, compounded semiannually. What is the future value of this investment, when Maurice needs to make a down payment?

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  1. sydnoelle
    • 2 years ago
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    @Lena772

  2. Lena772
    • 2 years ago
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    I don't know, sorry.

  3. sydnoelle
    • 2 years ago
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    @dumbcow

  4. dumbcow
    • 2 years ago
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    do you have a financial calculator? if so just plug in N = 12 I = 2.64/2 PV = 0 PMT = 2500 compute FV

  5. dumbcow
    • 2 years ago
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    oh wait sorry that is not right first find effective annual growth rate \[(1 + \frac{.0264}{2})^2 - 1\] set this as I N = 6 PV =0 PMT = 2500

  6. sydnoelle
    • 2 years ago
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    whats next

  7. dumbcow
    • 2 years ago
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    thats it, it will compute the future value do you have a financial calculator?

  8. sydnoelle
    • 2 years ago
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    no

  9. sydnoelle
    • 2 years ago
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    Katherine invested $1225 in a savings account which earns 3.25% interest compounded semiannually. What will the account be worth in 7 years?

  10. dumbcow
    • 2 years ago
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    haha what , that is same question as your last post i gave the formula for compound interest to solve this problem

  11. dumbcow
    • 2 years ago
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    so you have to do it by hand....hmm im guessing your class gave you a list of formulas to use then

  12. dumbcow
    • 2 years ago
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    http://en.wikipedia.org/wiki/Future_value#Compound_interest \[FV = 2500* \frac{(1+r)^n - 1}{r}\] n = 6 r = .02657424

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