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Math

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please check my answer thanks :)

How much money must be deposited now, at 6% interest compounded semiannually to yield an annuity payment of $4,000 at tha beginning of each six-month period,for a total of five years? Round your answer to the nearest cent.

A. $38,120.80
B. $35,144.44
C. $29,440.36

My answer is D

  • Math -

    You say your answer is D, but don't show a "D"

    If you did
    Present Value = 4000(1 - 1.03^(-10)/.03
    = 34120.81

    then you were correct.

  • Math recheck answer -

    I mean I got $29,440.36

    The only choice I have are $38,120.80
    35,144.44 0r $29,440.36

  • Math -

    How much money must be deposited now, at 6% interest compounded semiannually to yield an annuity payment of $4,000 at tha beginning of each six-month period,for a total of five years? Round your answer to the nearest cent.

    A. $38,120.80
    B. $35,144.44
    C. $29,440.36

    My answer is D

    Not knowing what D is, it is difficult to assess whether you are correct or not.

    Since the payments are made at the "beginning" of each 6 month period, the formula must be adjusted to
    P = R + R[1 - (1+i)^n] where i = .o6/2 = .03 and n = 1 period less than 5(2) = 9.

    Therefore, P = 4000 + 4000[1-(1.03)^-9]/i = $35,144.44 making B your correct choice.

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