home / study / business / finance / finance questions and answers / an investor plans to deposit r16 500 into a tax-free savings account at the end of each semi-annual ... Your question has been answered Let us know if you got a helpful answer. Rate this answer Question: An investor plans to deposit R16 500 into a tax-free savings account at the end of each semi-annu... An

Investor plans to deposit R16 500 into a tax-free savings account at the end of each semi-annual period for the next five years. The investor will earn 5.50% interest per annum, compounded monthly, on the savings account.How much will the investor have accumulated in the savings account at the end of the five-year period? Expert Answer Anonymous Anonymous answered this Was this answer helpful? 0 0 2,247 answers Deposit after each semi annual period=16500 Number of Period N=5*2=10 Interest rate=Annual 5.5% compounded monthly. 5.5%=0.055 Interest rate for 6 months=i (1+i)=(1+(0.055/12))^6 1+i=1.027817 i=0.027817 Compound Amount factor(CAF)=(F/A,i,P)=(((1+i)^N)-1)/i CAF=((1.027817^10)-1)/(0.027817)= 11.34929 Amount accumulated at the end of 5 years=16500*11.34929=187263 You can solve this by using excel FV function with Rate=0.027817, Nper=10, Pmt=16500 Amount accumulated=187263(Refer to attached excel screen shot)

How did you calculate the 11.34929