You are wishing to accumulate $9,000 for an expedition in 4 years’ time. To do this,...
You are wishing to accumulate $9,000 for an expedition in 4 years’ time. To do this, you will make 8 equal deposits (half yearly) with the first deposit today. If you earn 7.7% per annum compounding twice yearly, what deposit will be needed?
Homework Answers
![3.85% [7.7% / 2; Annual rate is converted into semiannual rate Semiannual Interest rate, RATE Number of semiannual payments, NPER Initial deposit in the account, PV Target maturity amount, FV Semiannual deposit type, TYPE Semiannual deposits required 8 [4 years x 2; as there are 2 semiannuals in a year] $0 $9,000 1 0 if deposits made at the end of each period; 1 if deposits made at the beginning of each period $945.58 [Ref: NOTE] NOTE Semiannual deposits required is calculated using EXCEL FUNCTION PMT(rate, n per,pv,fv,type) where rate-3.85%; nper-8; pv:0; fV-9000; type-1; Here, value for fv is negative because it denotes cash inflow; type 1 as semiannual deposits made at the end of each period 2,7%)2(7.7% / 2; Annual rate is converted into semiannual rate 1 Semiannual Interest rate, RATE 2 Number of semiannual payments, NPER 3 Initial deposit in the account, PV 4 Target maturity amount, FV 5 Semiannual deposit type, TYPE 6 Semiannual deposits required 4 2 [4 years x 2; as there are 2 semiannuals in a year] S0 $9,000 10 if deposits made at the end of each period;1 if deposits made at the beginning of each period PMT(B1,B2,B3,-B4,B5) [Ref: NOTE]](http://img.homeworklib.com/questions/99acd2b0-7283-11ea-9c4f-fb08b9ed4b95.png?x-oss-process=image/resize,w_560)
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You are wishing to accumulate $9,000 for an expedition in 4
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