Question

How much should be invested now at 7.25% compounded semiannually to have $45,000 in 11 years?

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Answer 1

- Future value in 11 years = $45,000

Calculating the Amount to be Invested today to accumulate the future Value:-

Where,

r =Periodic Interest rate = 7.25%/2 = 3.625%

n= no of periods = 11 years*2 = 22 (compounded semi-annually)

Invested Amount Now= $20,558.55

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