Question

An engineer deposits $2,000 per month for four years at a rate of 24% per year, compounded semi-annually. How much will he be able to withdraw 10 years after his last deposit?

Answer 1

The amount of money he will be able to withdraw after 10 years after his last deposit is $926,400.

Compound interest

• Principal, P = $2,000 × 12 × 4

= $96,000

• Time, t = 10 years
• Interest rate, r = 24% = 0.24
• Number of periods, n = 2

A = P(1 + r/n)^nt

= $96,000( 1 + 0.24/2)^(2×10)

= 96,000 (1 + 0.12)^20

= 96,000(1.12)^20

= 96,000(9.65)

= $926,400

Therefore, the amount of money he will be able to withdraw after 10 years after his last deposit is $926,400

Learn more about compound interest:

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