Question

How much money should be deposited today in an account that earns 3 %compounded semiannually so that it will accumulate to $ 13,000 in three​ years?

Answer 1

PV= $11,889.05

Step-by-step explanation:

Giving the following information:

Future Value (FV)= $13,000

Number fo periods (n)= 3*2= 6 semesters

Interest rate (i)= 0.03/2= 0.015

To calculate the initial deposit, we need to use the following formula:

PV= FV/(1+i)^n

PV= 13,000 / (1.015^6)

PV= $11,889.05