An engineer deposits $500 semiannually in his savings account for 5 years at 8% interest compounded...

An engineer deposits $500 semiannually in his savings account for 5 years at 8% interest compounded semiannually. Then, for 6 years he makes no deposits or withdrawals. The amount in the account after 11 years is about?

	A.	$9726
	B.	$9526
	C.	$9626
	D.	$9826

Expert Solution

i = 8%/2 = 4% per semiannual period

t = 11*2 = 22 semiannual periods

10 semiannual deposits and 12 periods of no deposit or withdrawal

FW of account = 500*(F/A,4%,10)*(F/P,4%,12)

= 500*12.006107*1.601032

= 9611.07 ~ 9626

option C is closest to answer,

Rahul Sunny answered 2 years ago

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