Answer:
$610.5
Step-by-step explanation:
Peggy deposits $ 100 each month in an account which gives 6% annual interest compounded after each month.
We have to calculate the future value of the account after 6 months.
Therefore, the first month's $100 will be compounded for 6 months at an interest rate of 0.5 % per month.
Again, the second month's $100 will be compounded for 5 months at an interest rate of 0.5 % per month and so on.
Hence, the final amount in the account will be
[tex]100(1+\frac{0.5}{100} )^{6} + 100(1+\frac{0.5}{100} )^{5}+ 100(1+\frac{0.5}{100} )^{4} + 100(1+\frac{0.5}{100} )^{3}+ 100(1+\frac{0.5}{100} )^{2}+100(1+\frac{0.5}{100} )^{1}[/tex]
= 100 × 1.03 + 100 × 1.025 + 100 × 1.02 + 100 × 1.015 + 100 × 1.01 + 100 × 1.005
= $610.5 (Answer)
