Compound Interest Rate: Future Value of Deposit
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Suppose you put $100 into a savings account today, the account pays a simple 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
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Solution Summary
This tutorial calculates the future value of a deposit made based on an annual interest rate of 6 percent.
Solution Preview
The semiannual interest rate is 6% / 2 = 3%.
Since at the end of 6 ...
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