Question

what is the accumulated value in 5 years of an annuity paying 200 at the end of each half year, with a nominal interest rate of 9 convertible semiannually g

Answer 1

FV= $2,457.64

Step-by-step explanation:

Giving the following information:

Number of periods= 5*2 = 10

Interest rate= 0.09/2 = 0.045

Semiannual payment= $200

To calculate the Future Value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= semiannual deposit

FV= {200*[(1.045^10) - 1]} / 0.045

FV= $2,457.64