Marcus wants to purchase a home in six years. He will contribute $2500 each year to a savings account with 2.64% interest, compounded semiannually. What is the future value of this investment, when Maurice needs to make a down payment?

Question

anonymous · Answer

@Lena772

lena772 · Answer

I don't know, sorry.

anonymous · Answer

@dumbcow

dumbcow · Answer

do you have a financial calculator?
if so just plug in
N = 12
I = 2.64/2
PV = 0
PMT = 2500

compute FV

dumbcow · Answer

oh wait sorry that is not right

first find effective annual growth rate
$$(1 + \frac{.0264}{2})^2 - 1$$
set this as I

N = 6
PV =0
PMT = 2500

anonymous · Answer

whats next

dumbcow · Answer

thats it, it will compute the future value

do you have a financial calculator?

anonymous · Answer

no

anonymous · Answer

Katherine invested $1225 in a savings account which earns 3.25% interest compounded semiannually. What will the account be worth in 7 years?

dumbcow · Answer

haha what , that is same question as your last post
i gave the formula for compound interest to solve this problem

dumbcow · Answer

so you have to do it by hand....hmm im guessing your class gave you a list of formulas to use then

dumbcow · Answer

http://en.wikipedia.org/wiki/Future_value#Compound_interest $$FV = 2500* \frac{(1+r)^n - 1}{r}$$ n = 6 r = .02657424