SOLUTION: I invested $200 a month for 18 years at 5.5% interest compounded semiannually. What will be the total amount saved at the end of the 18 years?

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Question 472077: I invested $200 a month for 18 years at 5.5% interest compounded semiannually. What will be the total amount saved at the end of the 18 years?
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!

A=P%281%2Br%2Fn%29%5E%28n%2At%29 Start with the compound interest formula


A=200%281%2B0.055%2F2%29%5E%282%2A18%29 Plug in P=200 (the amount invested), r=0.055 (the decimal equivalent of 5.5%), n=2 (since interest is compounded semiannually) and t=18 (18 years).


A=200%281%2B0.0275%29%5E%282%2A18%29 Evaluate 0.055%2F2} to get 0.0275


A=200%281.0275%29%5E%282%2A18%29 Add 1 to 0.0275 to get 1.0275


A=200%281.0275%29%5E%2836%29 Multiply 2 and 18 to get 36.


A=200%282.65549751736566%29 Evaluate %281.0275%29%5E%2836%29 to get 2.65549751736566.


A=531.099503473132 Multiply 200 and 2.65549751736566 to get 531.099503473132.


A=531.10 Round to the nearest hundredth (ie to the nearest penny).


So there will be $531.10 in the account.