Sammi deposits $12000 at the beginning of each 6-month period into a special savings account. This account will last for 7 years and pays the interest rate of 6% compounded semi-annually. What will be the balance when she closes the account in 7 years? $.......

Sammi deposits $12000 at the beginning of each 6-month period into a special savings account. This account will last for 7 years and pays the interest rate of 6% compounded semi-annually. What will be the balance when she closes the account in 7 years? $.......

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 25P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Sammi deposits $12000 at the beginning of each 6-month period into a special savings account. This account will last for 7 years and pays the interest rate of 6% compounded semi-annually.

What will be the balance when she closes the account in 7 years?

$.......

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