Answer
Mary Lou will have $\$23,152.64$ in her savings account when she is ready to enroll in college.
Work Step by Step
Find the total value (A) using the formula $A=P\left(1+\dfrac{r}{n}\right)^{nt}$ where $P$=principal amount, $r=$annual interest rate, $t$=time in years, and $n$=number of compounding periods in a year
The given problem has:
$P=\$15,000$
$t=8$
$r=5.5\%$
$n=2$ (since compounded semi-annually)
Use the formula above to obtain:
$A=\$15,000\left(1+\dfrac{5.5\%}{2}\right)^{2(8)}
\\A=\$15,000\left(1+\dfrac{0.055}{2}\right)^{16}
\\A=\$23,152.64154
\\A\approx \$23,152.64$
