.
For me, the original text is some soup prepared using English words (or something recalling English words),
but without a clear plan, without an exact prescription and without knowledge of relevant terminology.
Where did you take it ? From your phone ? Certainly, not from a textbook.
This soup is not a Math problem. To get a status of a Math problem, it must be edited and totally re-written.
My editing is THIS :
Josie opened an account by depositing $5000 at the very beginning and then adding $500 regularly
at the end of every six months. The account is for 10 years and has the rate of 4.7% per annum
compounded semiannually. How much interest the account earns over this time?
If you agree with my editing, then find my solution below.
If you do not agree, then please let me know WHY.
Solution
This account works as two separate saving plans:
- one plan is the initial deposit of $5000 for 10 years at the rate of 4.7% per annum compounded semi-annually, and
- the other plan is an Ordinary Annuity for 10 years with regular deposits of $500 every six months at the rate
of 4.7% per annum compounded semi-annually
First account works according to the formula
=
Second account is Ordinary Annuity saving plan and works according the formula
= .
Calculate future value and future value , then add them and subtract (5000 + 2*500*10) = 15000 dollars
that Josie deposited from the very beginning to the end in 10 years.
Then the expression + - 15000 dollars will be your answer.
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On Ordinary annuity saving plans see the lessons
- Ordinary Annuity saving plans and geometric progressions
- Solved problems on Ordinary Annuity saving plans
in this site.