quick maths question plzzz (1 Viewer)

[wallid]

when finding periodic payments , given the future value... what do u do if theres an initial balance :S


eg

person has 5000 in an account earning interest at 0.051 p.a, compounding half yearly.... what level deposit is required at the end of each half year for the next 5 years if the account balance is to be 9400 at the end of 5 years..


thanks in advance!

 

[ND]

The 5000 will accumulate to 5000(1.051)^5 after 5 years, so you want constant payments that will accumulate to (9400-5000(1.051)^5) in 5 years.

 

[alex_wp]

ND is wrong

because it is half yearly to get interest, so i=j2/2=(1+0.051)^(1/2)-1=0.002547

we assume the level deposit is "x", n=5years*2=10, it is a annuity question

the equation is

5000*(1+0.002547)^10+x*[(1.002547*10-1)/0.002547]=9400

x=$422.25

perfect!!!!

please give me some tutor wages.