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Sagot :
The future value of the savings account, after 18 years when it was withdrawn to help pay for Lois Martin's college expenses, would be $5,816.85.
How are the future values determined?
The future values of the savings account are calculated in two installments.
The first installment is for 10 years when the account earns 6% compounded semiannually.
Using the future value after 10 years, the second installment is for 8 years when the account earns 6% compounded quarterly.
Future values can be determined using the future value formula or an online finance calculator, as follows:
Data and Calculations:
Investment of $2,000 for 10 years:
N (# of periods) = 20 (10 years x 2)
I/Y (Interest per year) = 6%
PV (Present Value) = $2,000
PMT (Periodic Payment) = $0
Results:
FV = $3,612.22
Total Interest $1,612.22
Investment of $3,612.22 for 8 years:
N (# of periods) = 32 (8 years x 4)
I/Y (Interest per year) = 6%
PV (Present Value) = $3,612.22 ($2,000 + $1,612.22)
PMT (Periodic Payment) = $0
Results:
FV = $5,816.85
Total Interest $2,204.63
Thus, the value of the account after 18 years was $5,816.85.
Learn more about future values at https://brainly.com/question/989421
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