How much money must be invested now at 9% per year, compounded semiannually, to fund an annuity of 20 payments of $200 each, pai

Question

2 years ago

11

d every 6 months, the first payment being 6 months from now

1 answer:

ivanzaharov [21] · Answer 1 · 2023-07-06T16:32:15+03:00

The semiannual investment is mathematically given as

R=6.37

<h3>What is the semiannual investment?</h3>

Question Parameters:

the rate at 9% per year,

to fund an annuity of 20 payments of $200 each, paid every 6 months

Generally, the equation for the Intrest is mathematically given as

i=r/2

Therefore

$i=\frac{0.09}{2}$

i=0.045

The amount of annuity

$200=R*\frac{1+0.045^{-20}-1}{0.45}\\\\R=\frac{200*0.045}{1.412}$

R=6.3739

In conclusion, The semiannual investment would be R=6.37