Question

her secured investments. How much should she invest today to meet this purpose? 3. Amna wants to deposit $5000 into a saving fund at the beginning of each month. If she can earn 12% compounded interest semiannually how much amount will be there in he saving fund at the end of 8 years?

Answer 1

EAR = [(1 +stated rate/no. of compounding periods) ^no. of compounding periods - 1]* 100

? = ((1+12/(2*100))^2-1)*100

Effective Annual Rate% = 12.36

EAR = [(1 +stated rate/no. of compounding periods) ^no. of compounding periods - 1]* 100

12.36 = ((1+Stated rate%/(12*100))^12-1)*100

Stated rate% = 11.7106

FVAnnuity Due = c*(((1+ i)^n - 1)/i)*(1 + i )

C = Cash flow per period

i = interest rate

n = number of payments

FV= 5000*(((1+ 11.7106/1200)^(8*12)-1)/(11.7106/1200))*(1+11.7106/1200)

FV = 796915.58