Finance QUestion on accumulation

cliffstar

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Mar 16, 2010
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A sum of $1200 is deposited today into an account earning interest at 7.0% p.a. convertible 2 times a year. What deposit should be made in 2 years time if the account is to accumulate to $5600 in 6 years from today?

TO make it easier for you guys, The deposit of $1200 accumulated for (2×6) time units plus the accumulation of $X for the appropriate number of time units will equal $5600.

As an example to check your method, suppose that $1,200 is deposited today into an account earning 10% p.a. convertible 4 times a year. What deposit should be made in 3 years time if the account is to accumulate to $5,000 in 4 years from today? The answer is $2,915.89)
 
cliffstar said:
A sum of $1200 is deposited today into an account earning interest at 7.0% p.a. convertible 2 times a year. What deposit should be made in 2 years time if the account is to accumulate to $5600 in 6 years from today?
x = 1200(1 + .07/2)^4
y = 5600 / (1 + .07/2)^8

Deposit in 2 years = y - x
 
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