Today, Tiffany is starting to save up for a downpayment on a house. Currently she has $635 in an account earning 8% semiannually. She will deposit $138 at the b

Question

Today, Tiffany is starting to save up for a down payment on a house. Currently she has $635 in an account earning 8% semiannually. She will deposit $138 at the beginning of every two weeks for four years. After an additional six months (4.5 years from today), Tiffany pays the down payment of $15,000 for her new home. What balance is remaining in this account?

 

Use your Financial calculator to find the answer. 

Answer 1

You take 138 times 24, because she is depositing every 2 weeks.

Then you would take 3,312 times the 4 years.

 

A= P( 1+ r/n)^n*t

 

I described in the other post what each letter stood for.

 

A= 13,248( 1 + .08/2)^2*4.5

 

A= 13248 (1.04)⁹

 

A= 13248 (1.4233118124)

 

A= 18,856.03

 

Now you need to subtract the 15,000 payment to get the remaining balance.

 

18856.03 - 15000 = 3,856.03 dollars is what would be left in her account.