Question 1091601
Question:
An investment company pays 7​% compounded semiannually. You want to have $16,000 in the future.
How much should you deposit now to have that amount 5 years from​ now?
How much should you deposit now to have that amount 10 years from now​? 
 
Solution:
Present value=P
Future value=F=16000
(a) In 5 years, n=5*2=10 half-years
16000=P(1+0.07/2)^10
P=16000/(1+0.07/2)^10
=11342.70 should be deposited now.
(b) in 10 years, n=10*2=20 half-years
16000=P(1+0.07/2)^20
P=16000/(1+0.07/2)^20
=8041.05