Techniques and elements of Finance

• Mar 16th 2013, 03:32 AM
schwanson1
Techniques and elements of Finance
(Itwasntme)
• Mar 16th 2013, 03:33 AM
schwanson1
Re: Techniques and elements of Finance
Again sorry but I don't seem to be able to type in the writing box for some reason :S

Here's my question/ clues that were given with it:

A sum of $1900 is deposited today into an account earning interest at 9.9% p.a. convertible 2 times a year. What deposit should be made in 1 years time if the account is to accumulate to$5900 in 4 years from today?

(The deposit of $1900 accumulated for (2×4) time units plus the accumulation of$X for the appropriate number of time units will equal $5900. 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)
• Mar 16th 2013, 08:49 PM
majamin
Re: Techniques and elements of Finance
Quote:

Originally Posted by schwanson1
Again sorry but I don't seem to be able to type in the writing box for some reason :S

Here's my question/ clues that were given with it:

A sum of $1900 is deposited today into an account earning interest at 9.9% p.a. convertible 2 times a year. What deposit should be made in 1 years time if the account is to accumulate to$5900 in 4 years from today?

(The deposit of $1900 accumulated for (2×4) time units plus the accumulation of$X for the appropriate number of time units will equal $5900. 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)

$\displaystyle 1900\left(1+\frac{i^{(2)}}{2}\right)^8 + X\left(1+\frac{i^{(2)}}{2}\right)^6 = 5900$