SOLUTION: An investment company pays 9% compounded semiannually. You want to have $21,000 in the future. How much should you deposit now to have that amount 5 years from now?

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Question 1182416: An investment company pays 9% compounded semiannually. You want to have $21,000 in the future.
How much should you deposit now to have that amount 5 years from now?
Found 2 solutions by josgarithmetic, ikleyn:
Answer by josgarithmetic(39617)   (Show Source): You can put this solution on YOUR website!
semiannually in five years is 10 compounding periods.

---------solve for p.



---
"compounded semiannually;
factor is not "1.09".
Answer by ikleyn(52781)   (Show Source): You can put this solution on YOUR website!
.
An investment company pays 9% compounded semiannually. You want to have $21,000 in the future.
How much should you deposit now to have that amount 5 years from now?
~~~~~~~~~~~~~


            The setup in the post by  @josgarithmetic  is done  INCORRECTLY.

            I came to bring a correct solution. 


Your equation is


     = 21000,


or, EQUIVALENTLY,


     = 21000,

     = 21000,


which gives

    P =  = 13522.48 dollars.     ANSWER

Solved.

------------------

For all details and explanations,  look into these two lessons
    - Compounded interest percentage problems
    - Problems on discretely compound accounts
in this site,  and learn the subject from there.


After reading these lessons,  you will tackle such problems on your own without asking for help from outside.

Also,  you have this free of charge online textbook in ALGEBRA-I in this site
    - ALGEBRA-I - YOUR ONLINE TEXTBOOK.

The referred lessons are the part of this online textbook under the topic "Logarithms".


Save the link to this online textbook together with its description

Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson

to your archive and use it when it is needed.


Happy learning (!)



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