suppressive
New member
- Joined
- Feb 16, 2015
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- 7
Suppose $646.56 is deposited at the end of every six months into an account earning 6.5% compounded semi-annually. If the balance in the account four years after the last deposit is to be $20000, how many deposits are needed?
Answer: 18 deposits.
I've been stuck on this one for awhile. I'm using the BA II plus calculator to CPT the missing value, but I'm not sure what value the questions is asking for. I've extracted this so far:
PMT (Payment amount) = 646.56
FV (Future value) = 20000
N (# of total payments)= 4 years * 2 times per year = 8
C/Y (Interest compounding per year) = compounded semi-annually = 2
P/Y (Payments per year) = compounded semi-annually = 2
I/Y (Interest per year) = 6.5
Entering these values and pressing CPT PV (present value) gives me = 10993.7741
But it's asking for the number of deposits, so I don't really know where to go from here.
Any help is appreciated
Answer: 18 deposits.
I've been stuck on this one for awhile. I'm using the BA II plus calculator to CPT the missing value, but I'm not sure what value the questions is asking for. I've extracted this so far:
PMT (Payment amount) = 646.56
FV (Future value) = 20000
N (# of total payments)= 4 years * 2 times per year = 8
C/Y (Interest compounding per year) = compounded semi-annually = 2
P/Y (Payments per year) = compounded semi-annually = 2
I/Y (Interest per year) = 6.5
Entering these values and pressing CPT PV (present value) gives me = 10993.7741
But it's asking for the number of deposits, so I don't really know where to go from here.
Any help is appreciated
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