Question

Today, you start putting $200 into the bank every other month (bimonthly) for the next 10 years. The account pays annual interest of 3.5%. A month after your last deposit, rounded to the nearest dollar, you will have $__________ in the account. [Do not use commas or spaces in your numerical answer.]

Answer 1

Number of bimonthly payments in 10 years = 10 * 6 = 60

n = 60

Effective two-year rate, r = (1 + 0.035)^2 - 1

r = 0.071225

PMT = 200

This is the value of the account at the last payment date.

We need the value one month after the last payment. So, we will move this forward by one month.

The account value = 183,681.6347204957 * (1 + 0.035/12)

The account value = $184217.3728217638