How much must you deposit in an account
that pays 6% semi-annual interest, compounded annually, to have a balance of $9000 in 15 years?
I'm stuck with this question, please explain the steps for the answer.
4 answers
Are you sure it is not 6% annual compounded semi-annually ?
No Idea, the question completely asks that. I was thinking about 12% annually compounded, but the answer I got was wrong due to Solve and Check.
15 years is 30 periods each 3% or multiply by 1.03 every six months
9000 = d * 1.03^30
9000 = 2.427262471 d
d = $ 3,707.88
9000 = d * 1.03^30
9000 = 2.427262471 d
d = $ 3,707.88
12% is way high and no one expresses compounding annually with semi annual interest rate. Typo in your book I suspect.
1 answer