Question

How much money do I need now if I am going to recieve $5000 every 6 months (starting in 6 months) for 10 years if the interest rates are 4%/a compounded semiannually?

Answer 1

He needs to have $205783 amount of money to receive  $5000 every 6 months for 10 years.

What is Interest ?

Interest is the amount of money received , when a certain lump sum amount is deposited.

It is given that the person is receiving  ,

Interest = $5000 ,

after six months , every six month

Time Period = 10 years

Interest Rate = 4%

Compounded Semiannual

Let the principal amount be $x

Compound Interest is given by

Amount = P[ 1 + r/n]ⁿˣ

Here x is the time period

Therefore the Amount = x{ 1 +0.04/2}²⁰

x + 5000 *20 = x{ 1 +0.04/2}²⁰

x + 100000 = 1.486 x

x = $205783

Therefore he needs to have $205783 amount of money to receive  $5000 every 6 months for 10 years.

To know more about Interest

brainly.com/question/13324776

#SPJ1