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

Question

3 years ago

5

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.

1 answer:

Andrej [43] · Answer 1 · 2022-03-29T12:07:24+03:00

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

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