Answer:
The child will have $2895.81 when it turns 18.
Step-by-step explanation:
Semiannual compounding corresponds to compounding 5% twice a year.
After 1st (6mo) period, the initial deposit $500 grows to 500*1.05. After the second period, it grows to 500*1.05*1.05. After the n-th period, it grows to [tex]500\cdot 1.05^n[/tex].
To answer the question we need to consider the fact that 18 years correspond to 36 half-year periods, and then we're ready to roll:
[tex]X = 500\cdot 1.05^{36}=2895.81[/tex]
The child will have $2895.81 when it turns 18.
