Suppose you put $100 into a savings account today,the account pays a nominal annual interest rate of 6 percent,but compounded semiannually,and you withdraw $100 after 6 months.What would your ending balance be 20 years after the initial $100 deposit was made?
A) $226.20
B) $115.35
C) $62.91
D) $9.50
E) $3.00

Question

Quizplus · Accepted Answer

Step 1 - Calculate the amount of interest earned on the $100 before withdrawal.
100 × .03 = $3
Step 2 - Use $3 as the present value and calculate the future value.
FV = PV × 11ea7fdb_fc27_49b2_a768_737242fe6684_TB2902_00 FV = 3 × (1.03 11ea7fdb_fc27_70c3_a768_e1cac9dccfe2_TB2902_00 = $9.50
Using a financial calculator:
N = 39, I/Y = 3, PV = -3, PMT = 0, cpt FV = $9.50

Suppose You Put $100 into a Savings Account Today,the Account