Question
This portfolio was started 2 years ago. What is the current value of the portfolio? - Weekly deposits of 50 into an account earning 1.5% compounded weekly - A 2500 investment averaging 3.25% compounded semi-annually
Solution
4.3
(239 Votes)
Kelvin
Professional ยท Tutor for 6 years
Answer
###
7946.59$
Explanation
## Step 1: Calculate the total weekly deposits.### There are 52 weeks in a year, so over 2 years there are
weeks. The total deposit is
50 = \
.## Step 2: Calculate the future value of the weekly deposits.### The weekly interest rate is
. The number of compounding periods is 104. Using the future value of an ordinary annuity formula:
, where
,
, and
.
5278.87
2500 investment.### The semi-annual interest rate is
. The number of compounding periods over 2 years is
. Using the compound interest formula:
, where
,
, and
.
2667.72
\
2667.72 = \
.