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Sindrei [870]
3 years ago
9

Maurice wants to purchase a home in six years. He will contribute $350 each month to a savings account with 2.12% interest, comp

ounded semiannually. What is the future value of this investment, when Maurice needs to make a down payment?
Mathematics
1 answer:
Kruka [31]3 years ago
5 0
First we need to find the semiannual payment because the interest rate is semiannually
350×6 months=2100

Now find the future value of an annuity ordinary using the formula of
Fv=pmt [((1+r/k)^(kn)-1)÷(r/k)]
Fv future value?
PMT semiannual payment 2100
R interest rate 0.0212
K compounded semiannual 2
N time 6years
Fv=2,100×(((1+0.0212÷2)^(2×6)
−1)÷(0.0212÷2))
=26,722.33
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Step-by-step explanation:

From the problem we know that 12% of Lisa's original weight is 21 pounds. Let's call Lisa's original weight x and rewrite what we know from the question in terms of x.

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If you don't have a calculator or would like to learn another way to solve this problem, you can use proportions.

We know that 12% of x is 12, so what is 100% of x? (this is another way to rewrite the question)

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We can write this because we know that the ration of 12% to 21 pounds is going to be the same ratio of 100% to Lisa's entire body weight.

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