In order to save money for their daughter's college education, new parents Ashley and John decide...

In order to save money for their daughter's college education, new parents Ashley and John decide to put $325 dollars into a savings account that yields 9.2% interest compounded semi-annually. After making 20 equal payments of $325 they stop making deposits and simply allow the money to grow at the of 9.2% compounded semiannually for 8 more years. How much money will be in the account at the end of this time period?

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Expert Solution

Calculating Future Value at the end of 10 years,

Using TVM Calculation,

FV = [PV = 0, PMT = 325, N = 20, I = 0.092/2]

FV = $4,191.18

Value at the end of 18 years = 4,191.18(1 + 0.092/2)¹⁶

Value at the end of 18 years = $8,606.83

jeff jeffy answered 2 years ago

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