Andy has set up an ordinary annuity to save for his retirement in 16 years. If his semi-annual payments are $250 and the annuity has an annual interest rate of 7.5%, what will be the value of the annuity when he retires?
How do I solve this equation?
What steps do I take to solve it?
Thank You!
6 answers
don't you have a formula for the future value of an annuity?
250[(1+.075/2)^16-1]
=.8022278066/(.075/2)
=21.39274151
250(21.39274151)
=5348.18
So, would 5348.18 by the answer?
=.8022278066/(.075/2)
=21.39274151
250(21.39274151)
=5348.18
So, would 5348.18 by the answer?
good start, but 16 years means 32 payments.
Oh, okay
So, I would take 250[1+.075/2)^36-1
=.9517958171
.951795171(.07/4)
=50.76244358
650(50.76244358)
=32995.56 and this would be the answer?
So, I would take 250[1+.075/2)^36-1
=.9517958171
.951795171(.07/4)
=50.76244358
650(50.76244358)
=32995.56 and this would be the answer?
Oops, I entered it wrong.
I would take
250[1+.075/2)^3-1
the answer would be 14986.93?
I would take
250[1+.075/2)^3-1
the answer would be 14986.93?
Yes
1 answer