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Olegator [25]
3 years ago
5

You would like to have ​$4,000 in 55 years for a special vacation following graduation by making deposits at the end of every si

x months in an annuity that pays 6.56.5​% compounded semiannually. Determine how much you should deposit at the end of every six month.
Business
1 answer:
Andrej [43]3 years ago
3 0

Answer:

total amount deposit at end of every 6 month is $445.37

Explanation:

Future value required=   4000

Total 6 months Period in 4 years (n) = 4*2 =   8

Interest rate 6.56% or 0.656 compounded Semiannual  

semiannual interest rate (r) =0.0656/2=   0.0328

Future value of annuity formula = P *{ (1+r)^n - 1 } / r    

4000 = P*(((1+0.0328)^8)-1)/0.0328  

4000= P* 8.98

P = $ 445.37

total amount deposit at end of every 6 month is $445.37

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