Question

You are going to save money for your son’s education. You have decided to place $4,710 every half year at the end of the period into a saving account earning 4.31 percent per year, compounded semi-annually for the next 13 years. How much money will be in the account at the end of that time period? Round the answer to two decimal places.

Answer 1

We can find the answer using the future value of annuity formula:

Where,
FVA = Future Value of Annuity
A = Annuity
i = rate of interest
n = number of years
a = number of payments in a year

Therefore, at the end there will be $161,911.62 in the account.

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If you want to do it in excel, refer the following:

Semi Annual payment	4,710
Saving interest rate	4.31%
Number of years	13
Future value	161,911.62

Excel functions used: