Question

If $7000 is deposited at the end of each half year in an account that earns 6.1% compounded semiannually, after how many half years will the account contain $120,000? (Round your answer UP to the nearest half year.)

Answer 1

Information provided:

Present value= $7,000

Interest rate= 6.1%/2= 3.05% per semi-annual period

Future value= $120,000

The question is solved by calculating the time of the investment.

Enter the below in a financial calculator to compute the time of the investment:

PV= -7,000

FV= 120,000

I/Y= 3.05

Press the CPT key and N to compute the time of the investment.

The value obtained is 94.58

Therefore, the account will contain $120,000 after 94.58 half years.

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