Question

17. Jade Kenyon is a free spirit who is saving her money to purchase a 36 foot, blue-water capable, sailboat. Assuming Jade wishes to have saved $50,000 at the end of five years and that her investment account will earn 5.50%, what bi-weekly deposit must she make to attain her savings target? Place the appropriate values in the proper cells in row 15, given the columns as provided below. The remaining instructions are stated in Q1.

Row	Column letter
Number	A	B	C	D	E	F
13	Q4.				ç Write problem type here.
14	m	#Yrs	Ann Rate	PV	PMT	FV
15

EXACT EXCEL FUNCTION:

Answer 1

Investments must be made bi-weekly. Assuming 52 weeks in a year, total installments in a year = 52/2 = 26.

Total number of investments = 26*5 = 130.

Interest rate provided is 5.5% per year.

Converting it to bi-weekly rate, 5.5/26 = 0.2115 %

$50,000 at the end of 5 years indicate the Future worth.

We know FW = Installment * FW factor

FW factor = (1+i)^n - 1
    i

=((1.002115^130)-1)/0.002115 = 149.4481

50000 = Installment * 149.4481

Bi-weekly installment = 50000/149.4481

= $334.56

Putting it into an excel function,

=50000/(((1.002115^130)-1)/0.002115)

Hope this helps :)