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15 September, 07:59

Kathleen deposit $20 into her account that earns 2.5% interest that is compound twice a year. How much money will kathleen have in her account in 30 years?

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  1. 15 September, 08:04
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    Present value, P = 20

    compounding interest per 6 months, interest = 0.025/2 = 0.0125

    Number of periods, n = 30*2 = 60 (half-years)

    Future value in 30 years

    =P (1+interest) ^n

    =20 (1.0125) ^60

    = $42.14
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