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An engineer who is saving for her retirement plans to deposit $500 every quarter, starting one quarter from now, into an investment account. If the account pays interest at 6% per year, compounded semiannually, the total she will have at the end of 25 years is closest to:

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Answer:

FV= $114,401.52

Explanation:

Giving the following information:

Quarterly deposit= $500

Interest rate= 0.06/4= 0.015

Number of periods= 25*4= 100

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= semiannual deposit

FV= {500*[(1.015^100) - 1]} / 0.015

FV= $114,401.52

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