To find out how much will be in the fund after 10 years with annual compounding interest of 4%, we need to use the formula for compound interest:
\[ A = P \left(1 + \frac{r}{n} \right)^{nt} \]
where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount (the initial amount of money).
- \( r \) is the annual interest rate (decimal).
- \( n \) is the number of times that interest is compounded per year.
- \( t \) is the number of years the money is invested for.
Given:
- \( P = 4900.00 \) (amount set aside at the beginning of every six months, so we consider this as the principal for each period)
- \( r = 0.04 \) (4% annual interest rate, compounded annually)
- \( n = 1 \) (compounded annually)
- \( t = 10 \) years (total duration)
### Step-by-Step Calculation:
1. **Calculate the semi-annual contribution period:**
The annual rate
