Answer:
$236.79
Step-by-step explanation:
To calculate the accumulated amount in the annuity, we'll use the formula:
A = P * (1 + r/n)^(nt)
Where:
- A is the accumulated amount,
- P is the periodic payment (the amount invested in each period),
- r is the annual interest rate (as a decimal),
- n is the number of compounding periods per year, and
- t is the total number of years.
Given:
- P = $80 (invested semiannually),
- r = 5.5% annually (or 0.055 as a decimal),
- n = 2 (compounded semiannually), and
- t = 20 years,
Let's plug in the values:
A = 80 * (1 + (0.055/2))^(2*20)
Now, let's calculate:
A ≈ $236.79
So, the accumulated amount in the annuity, after 20 years, with $80 invested semiannually at a 5.5% annual interest rate compounded semiannually, is approximately $236.79.
