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Zina [86]
3 years ago
13

How much money should be deposited today in an account that earns 5% compounded semiannually so that it will accumulate to $14,0

00 in three​ years?
Business
1 answer:
AnnyKZ [126]3 years ago
4 0
First, calculate for the effective interest.

   ieff = (1 + i/m)^m - 1

Substituting the known values,
  
  ieff = (1 + 0.05/2)^2 - 1
  ieff = 0.050625

Then, using the equation,

   F = P x (1 + ieff)^n

Substituting,

  14,000 = P x (1 + 0.050625)^3

The value of P from the equation is 12072.15612

<em>Answer: $12,072.16</em>
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