# Math

please explian how to figure this out thanks :)

How much money must be deposited now at 6% interest compounded semi-annually, to yelid an annuity payment of \$4,000 at the beginning of each six-month peroid for a total of five years I need to then round my answer to the nearest cent

1. 👍
2. 👎
3. 👁
1. How much money must be deposited now at 6% interest compounded semi-annually, to yelid an annuity payment of \$4,000 at the beginning of each six-month peroid for a total of five years I need to then round my answer to the nearest cent

The present value of an annuity that willpay out \$4000 at the end of every 6 month period (not including the first day of the 5 year period) paying 6% compounded semi-annually derives from P = R[1 - (1 + i)^-n)]/i where P = the present value, R = up front deposit, i = the decimal periodic interest rate, and n = the number of interest bearing periods.

Therefore, P = 4000[1 - (1 + .03)^10)]/.03 = \$34, 121.

The present value of an annuity that will pay out \$4000 at the beginning of every 6 month period paying 6% compounded semi-annually would be
P = 4000[1 - (1 + .03)^-9)]/.03 = \$31,144 + \$4000 = \$35,144. In this case the present value loses \$4000 at the start of the 5 year period before any interest is gained and only 9 interest bearing periods remain.

1. 👍
2. 👎

## Similar Questions

1. ### Algebra

Find the final amount of money in an account if \$2,600 is deposited at 4% interest compounded annually and the money is left for 7 years.

2. ### chemistry

A current of 45A is passing through a solution of gold salt for 1:45 minutes a)calculate the mass of AU deposited b )number of mass deposited c) if the same current is use find the time taken for 5.5 g of the AU deposited

3. ### Chemistry

A current of 45A is pass through a solution of gold salt for 1hours 45minute. Calculate Mass of gold deposited, b) number of mole deposited c) if the same current is used find the time taken for 5.5g to be deposited

4. ### Math

Find the final amount of money in an account if \$7,500 is deposited at 7 % interest compounded semi-annually and the money is left for 5 years. The final amount is \$ Answer pls

1. ### math

2s^3 – 4r^1 r = 1 and s = 5 explian how to solve it

2. ### Math

Find the final amount of money in an account if \$3,300 is deposited at 6% interest compounded quarterly (every 3 months) and the money is left for 8 years. The final amount is \$ Round answer to 2 decimal places Answer plsss!

3. ### Math - ratio

Mr. Rahim had the same amount of money in his three bank accounts at first. He deposited \$44 into account b and \$ 80 into account c. In the end, the ratio of the amount of money in account a to the amount of money in account c was

4. ### Math

Find the final amount of money in an account if \$2,600 is deposited at 5% interest compounded annually and the money is left for 9 years. The final amount is \$ Round answer to 2 decimal places

1. ### math

Vanessa deposited money into a bank account that earned 1.25% simple interest each year. After 1/2 year, she had earned \$5.00 in interest on the account. If no other money was deposited into or withdrawn from the account, how much

2. ### Mathematics

Find the final amount of money in an account if \$9,300 is deposited at 5% interest compounded semi-annually and the money is left for 10 years. The final amount is \$ Round answer to 2 decimal places Answer pls!!

3. ### Math

Find the final amount of money in an account if \$2,600 is deposited at 5% interest compounded annually and the money is left for 9 years. The final amount is \$ Incorrect. Round answer to 2 decimal places What’s the answerrr?

4. ### mathematics

Write each answer in polynomial in simplest form Jack deposited some money in his savings account in September. In October he deposited twice as much as in September,and in November he deposited one-half as much as in September.