# Math

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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

• Math -

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

then you were correct.

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

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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