Question 885389

How much money should be deposited today in an account that earns 3% compounded semiannually so that it will accumulate to $9000 in 3 years?

I have done it like this, 9000/(1+(.03/6))^6*3 and it gave me the answer $8227.23 but it says the correct answer is $8230.88 and I cannot find out how they came up with that answer.
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Good effort!!

The mistake you made though was the number of compounding periods, per year. The  deposit is being
compounded SEMIANNUALLY, meaning TWICE per year. However, you have 6 (six) annual compounding periods. 
Hence, the equation should be: {{{highlight_green(highlight_green(P = 9000/(1 + .03/2)^(2*3)))}}}. 
You should then obtain the correct value for P, or present value of $8,230.88.

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