Question

Effie plans to save $100 every six months for the next 5 years. If her account earns 14 percent, compounded semi-annually, how much will be in her account in 5 years?

Answer 1

Answer:

$1,381.64

Explanation:

For this question, we determine the Future value. By applying the future value formula that is shown on the spreadsheet. Kindly find it below:

Data provided

Future value = $0

Rate of interest = 14%  ÷ 2 = 7%

NPER = 5 years ××2 = 10 years

PMT = $100

The formula is shown below:

= -FV(Rate;NPER;PMT;PV;type)

So, after solving this, the future value is $1,381.64