Question

a. Your timeline

b. Problem Type: FVA PMT

c. Solution: $10,000 x FVA factor (6%/12, 5*12) = FVA answer $10,000 x 69.77 = $143.33 5.

1. Suzie will save $300 every 6 months (semi-annually) for the next 10 years. How much will she have if the interest rate is 8%?

Answer 1

No of years = 10

Suzie will save $300 every six months

Hence total no of parts in entire period of 10 years is 20

Interest rate = 8% pa

Int rate for 6 months = 4%

The amount she will have at the end of 10 years = 4,077.10 Approximately 4,077

Parts	Amount Saved $	PV factor @4%	Discounted savings
1	300	0.962	288.46
2	300	0.925	277.37
3	300	0.889	266.70
4	300	0.855	256.44
5	300	0.822	246.58
6	300	0.790	237.09
7	300	0.760	227.98
8	300	0.731	219.21
9	300	0.703	210.78
10	300	0.676	202.67
11	300	0.650	194.87
12	300	0.625	187.38
13	300	0.601	180.17
14	300	0.577	173.24
15	300	0.555	166.58
16	300	0.534	160.17
17	300	0.513	154.01
18	300	0.494	148.09
19	300	0.475	142.39
20	300	0.456	136.92
			4077.10