Future Value of General Annuity - A Combination Problem
This is an example of a problem that combines two periods of compound interest. One of these periods involves the computation of the future value of an ordinary general annuity. The problem is the following:
Scott has saved $1,200 every six months in a savings account earning 5.25% compounded quarterly for the last six years. He plans to leave the accumulated savings for eight years in the savings account at the same interest rate.
a) How much will Scott have in total in his savings account?
b) How much of this will be interest?