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FinanceQ&A LibraryHow much money should be deposited today in an account that earns 5%compounded semiannually so that it will accumulate to $7000 in 2 years?(Round to the nearest pen ny - hundredth place. For example, $123.46)A= PCI)7006 PCIntCI+a a700U P(I 0.037000 PCIPC it 00116667) ayOO41666667OOL7, 7a 6. 6 C7a6.67,726 64- 7/000ndhe depestedQuestion

Asked Oct 26, 2019

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Step 1

Let P be the amount to be deposited today.

r = rate per annum = 5%

m = frequency of compunding in a year = semi annual compounding = 2 times in a year

n = number of years = 2

A = Accumulated value = $ 7,000

Step 2

Hence, the conecting equation is:

A = 7,000 = P x (1 + r / m)n x m = P x (1 + 5% / 2)2 x 2 = 1.1038P

Hen...

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