Question

how much must be deposited at the beginning of every 2 months in an account that pays 7% compounded every 2 months,so that the account will contain 20000.00 at the end of 2 years?

Answer 1

$17,415.08

1) Since in this question we have:

Present Value: ?

Future Value: $20000

rate: 7% compounded every two months

Period: 2 years

2) Let's plug that information in the formula for Compounded Interest, considering that 7% every two months is 0.07 for 6 months.

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ 20,000=P(1+(0.07)/(6))^(6\cdot2) \\ 20,000=P(1+0.0116)^(12) \\ 20,000=P(1.0116)^(12) \\ 20,000=1.14843P \\ P\approx17415.08 \end{gathered}`

3) So rounding off to the nearest tenth the present value to be invested is $17,415.08