Two errors . . .
Find the present value of an annuity that pays $6000
at the end of each 6-month period for 8 years
if the interest rate is 8% compounded semiannually.
According to my book, the answer is $69,913.77 . . . . Right!
I don't understand why?
according to my method i get another answer..
An = 6000 [ 1- (1+0.01)^-16/.01 = 90,000 . . . . Incorrect formula
. . and incorrect interest rate.
The rate is 8% compounded semiannualy: .
The formula is: .
And we have: .