Question

Jane needs $30,000 to buy another new car in eight years. How much should she deposit at the end of each half year into an account that earns 4% interest compunded semianually?

Answer 1

Let her semi-annual payment be P

P (1.02)^16 - 1)/.02 = 30000
P(18.63928.. = 30000

P = $1609.50