Question 274732: Finite Math is hard how do I solve this question.
Find the amount of each payment to be made into a sinking fund so that enough will be present to accumulate the following amounts. Payments are made at the end of each period. $75,000; money earns 6% compounded semiannually for 4 1/2 years
Answer by anantha(86)   (Show Source):
You can put this solution on YOUR website! using this method solve these type of problems are easy
formula is used to solve these type of problems
amount A= p
here p= $75,000
rate of interest per year =6%, this is very important step convert rate of interest per half year for this we divide the rate of interest by 2
now rate of interest for half year=6%/2=3% ,now r=3%
now the time period=4 1/2 years=in 4 years we are having 8 half years ,in 4 1/2 years we are having 9 half years, now n=9
p=$75,000,r=3%,n=9
amount A=p
substitute p,r,n values in this formula we get amount compounded half-yearly
A=$75,000
A=$75,000
A=$75,000
A=$75,000*1.03*1.03*1.03*1.03*1.03*1.03*1.03*1.03*1.03
do this using calculator
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