ABC Company wants to have $79,254 in five years. The company intends to accumula

Question

ABC Company wants to have $79,254 in five years. The company intends to accumulate that amount by making equal semi-annual cash deposits at the beginning of every six months for five years into a bank account that pays 10% interest compounded semi-annually. Calculate the amount of each semi-annual deposit. Do not use decimals in your answer You will need to use the time value of money table factors posted i n canvas to answer this question. To access these factors, click modules and then scroll to week 12. Click on the link labeled present & future value table factors. No credit will be awarded for this question using a means other than these table factors to answer this question.

Explanation / Answer

Semi-annual deposit can be calculated using PMT function on a calculator

Switch the calculator to BEGIN mode

Insert N = 5 x 2 = 10, I/Y = 10%/2, PV = 0, FV = 79,254

=> Compute PMT = $6,001 is the semi-annual deposit

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