She invests some amount in a saving account of fixed interest compounded half-yearly. It says to find its Future Value after six years.
The principal amount is P = $4,848.
Annual interest rate is 5% i.e. r = 0.05
Compounding period is two times per year i.e. n = 2.
Time of investment is t = 6 years.
We know the formula of Future Value is given by :-
[tex] FV=P*(1+\frac{r}{n})^{nt} [/tex]
We can plug the given values in the formula to calculate the answer.
[tex] FV = 4848*(1+\frac{0.05}{2})^{(2*6)} \\\\
FV = 4848*(1+0.025)^{(12)} \\\\
FV = 4848*(1.025)^{(12)} \\\\
FV = 4848*(1.344888) \\\\
FV = 6520.02102 [/tex]
Hence, future value of investment after six years is 6,520.02 dollars.
