Hello Mister77

Welcome to Math Help Forum! Originally Posted by

**Mister77** Hi! Can somebody solve this for me, it's pretty easy, but the result the book gives me seems wrong (or I'm wrong!). I need a second opinion though...here it is:

A man saves 250£ every half-year and invests it at Compound Interest at 4.5 per cent. What will be the amount of his savings in 8 years if the last amount saved bears interest for 6 months?

Thanks for the help everyone!

P.S. The book gives me 4,860£ pounds but as much as I try I get 4,900..

The vital piece of information that is missing is how often the interest is calculated. If it is every six months (as the question tends to suggest) then the interest payable at the end of every six month period is $\displaystyle 2.25\text \%$ of the amount of his savings at the beginning of that period.

At the end of the first six months, he would then have:£ $\displaystyle 250\times(1+ 0.0225)=$ £ $\displaystyle 255.625$

before he makes his second investment of £ $\displaystyle 250$.

At the end of the next six months he has:£ $\displaystyle 505.625\times(1+ 0.0225)=$ £ $\displaystyle 517.0016$

before his next investment; and so on.

Continuing in the same way, at the end of $\displaystyle 8$ years, he has £ $\displaystyle 4858.26\approx$ £ $\displaystyle 4860$.

Grandad