Question

Question 2 of 13 If an account that pays intertest at 8.0% compounded semi-annually, how much should you deposit today to pay yourself $1,200 every six months for 8 years if the first withdraw is deferred for 3 years and six months?

Answer 1

Value in 3 years Px[1-(1:(1+r)^n)]=r| Here, 8% A Interest rate per annum B Number of years C Number of compoundings per per annum A: Interest rate per period (r) BxC Number of periods (n) Payment per period (P) 4% 16 1,200 Value in 3 years 13,982.75 1200x(1-(1:(1+4%)^16)):-4%

Deposit today FVX(1=(1+r)^n) Here, 8% A Rate per annum B Number of years c Number of compoundings per per annum A:C Rate per period (r) BxC Number of periods (n) Future value (FV) 4% 13,982.75 Deposit today $ 11,050.77 13982.75x(1:(1+4%)^6)

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