anonymous
  • anonymous
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?
Mathematics
chestercat
  • chestercat
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anonymous
  • anonymous
@Lena772
Lena772
  • Lena772
I don't know, sorry.
anonymous
  • anonymous
@dumbcow

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dumbcow
  • dumbcow
do you have a financial calculator? if so just plug in N = 12 I = 2.64/2 PV = 0 PMT = 2500 compute FV
dumbcow
  • dumbcow
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
anonymous
  • anonymous
whats next
dumbcow
  • dumbcow
thats it, it will compute the future value do you have a financial calculator?
anonymous
  • anonymous
no
anonymous
  • anonymous
Katherine invested $1225 in a savings account which earns 3.25% interest compounded semiannually. What will the account be worth in 7 years?
dumbcow
  • dumbcow
haha what , that is same question as your last post i gave the formula for compound interest to solve this problem
dumbcow
  • dumbcow
so you have to do it by hand....hmm im guessing your class gave you a list of formulas to use then
dumbcow
  • dumbcow
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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