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what is the size of the payments that must be deposited at the beginning of each 6-month period in an account that pays 5.4%, compounded semiannually, so that the account will have a future value of $120,000 at the end of 16 years? (round your answer to the nearest cent.)

Respuesta :

The size of the payments that must be deposited for the conditions of the future value given above will be $22,299.

The present value of a future annuity can be calculated using the generalized formula and set of provided information, and input of the values into the formula as shown in the computation below,

Present Value = Future Value [1/(1+r)^n]

Present Value = 120,000 [1/(1+0.054)^32]

Present Value = 120000 [1/(1.054)^32]

Present Value = $22,299

Therefore, the present value of the given information will be $22,299.

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