quick question for u geniuses (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!

 

[Casmira]

isnt this general mathematics q?

 

[wallid]

i dunno> im doin it at uni..

dont u guys do annuities..

 

[Casmira]

its general maths not 4u, but i'll figure it out for you give me 5min

 

[Casmira]

edit: i think i got this wrong but anyway, its two steps afaik

first step;
A = P(1+r)^n
A = 5000(1+(0.051/2))^5
A = 5670.852193

This is the most the single investment will make, so now you need a further (9400 - 5670.852193) $3729.147807 in FV payments, now it gets easy

see attachment for the rest

 

[wallid]

yeh thats look right


thanks heaps!!!!!!

 

[Casmira]

jesus christ i got it wrong! i realised i didnt double the N to 10

answer should be $332.10 sorry (payments)