Question

A superannuation fund receives an amount of $479 at the end of each fortnight from one of its members. It invests this amount for the member ina cash fund that pays 6.3 % p.a. compounded fortnightly. Itf this interest rate is maintained, how much would Question 3 Not yet answered be in the member's account after 13 years, if no charges or taxes are deducted? Marked out of 1.00 (Assume that there are 365 days and 26 fortnights per year. Give your answer to the nearest cent, omitting the dollar sign) PFlag question Answer 359444.81

Answer 1

As per the question the fund receives an amount at the end of each fortnight is (A)= $479

The rate of interest paid by the fund = 6.3% = 0.063per year compounded fortnightly

(1 year = 26 fortnight)

The required rate of interest (i) = 0.063/26 =0.002423076

The period of deposit (N) = 13 years = 13x26 = 338 fortnight

The future value of the deposit (F) = ?

F = A[{(1+i)^N-1}/i]

F = 479[{(1+0.002423076)³³⁸-1}/0.002423076]

F = 479[{(1.002423076)³³⁸-1}/0.002423076]

F = 479(522.46972745) = $250262.9994 or Approx $250263

The future value of the deposits after 13 year is Approx $250263