Question

Suppose ​$117 is deposited at the end of every month into an account earning 8.7 %...

Suppose ​$117 is deposited at the end of every month into an account earning 8.7 % per annum compounded semi-annually. If the balance in the account is to be $14,400, how many deposits are​ needed?

The number of deposits needed is__

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Answer #1

The number of deposits needed is 43.4

To calculate number of periods, we use NPER function in excel

=NPER (rate, pmt, pv, (FV), [type])

rate: Interest rate per period, as it is semiannual we divide by 2
pmt: amount paid each period, as it is a cash outflow it is denoted by - sign
pv - present value

fv, future value, which is the balance at the end of the period
type - [optional] When the payment is end of period, by default option is 0.

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