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How much money must be invested now at 9% per year, compounded semiannually, to fund an annuity of 20 payments of $200 each, paid every 6 months, the first payment being 6 months from now

Sagot :

okpalawalter8

The semiannual investment is mathematically given as

R=6.37

What is the semiannual investment?

Question Parameters:

the rate at 9% per year,

to fund an annuity of 20 payments of $200 each, paid every 6 months

Generally, the equation for the Intrest  is mathematically given as

i=r/2

Therefore

[tex]i=\frac{0.09}{2}[/tex]

i=0.045

The amount of annuity

[tex]200=R*\frac{1+0.045^{-20}-1}{0.45}\\\\R=\frac{200*0.045}{1.412}[/tex]

R=6.3739

In conclusion, The semiannual investment would be R=6.37

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