Question

Harriet has been depositing money into her bank account for 15 years she puts sh100 per month for first 5 years and for the next five years she puts 200 shillings per month for the last 5 years she put 300shillings per month interest for the whole period has been 8%compatible semiannually calculate accumulated value of payment one month after payment

Answer 1

First 5 years (12 months × 5 years = 60 months)

$100 × 60 = $6,000

Next 5 years

$200 × 60 = $12,000

Last 5 years

$300 × 60 = $18,000

Total amount deposited in 15 years

$6,000 + $12,000 + $18,000 = $36,000

Interest of 8% semiannually (this rate is paid every half of the year, that is 2 times a year).

Rate in first half of the first year

8/100 × (100×6)

= $48

In the first year interest = 48 ×2 = 96

Intrest in first 5 years = 96 ×5 = $480

Next 5 years

8/100 × (200 × 6) = $96

96 × 2 = 192 (rate in a year)

192 × 5 = $960 (rate in 5 years)

Last 5 years

8/100 × (300 × 6) = $144

144 × 2 = 288

288 × 5 = 1440

Total intrest accumulated in 15 years = 480 + 960 + 1440 = $2880

Accumulated value = $36,000 + $2880

= $38,880