Merle Fonda opened a new savings account. She deposited $40,000 at 10 percent compounded semiannually. At the start of the fourth year, Merle deposits an additional $20,000 that is also compounded semiannually at 10 percent. At the end of 6 years, the balance in Merle's account is:
From the start to the end of the 3rd year: A = P * ( 1 + 0.05 )^6 A = 40,000 * 1.05^6 = $53,603.83 + $20,000 ---------------------- $73,603.83 At the end of the 6th year: A = 73,603.83 * 1.05^6 = $98,636.16
