Math/Finance help please....?
Mark bought a boat from his boss, Marcia. Mark is going to make semiannual deposits for the next 6 years into his account, which pays 7.6% compounded semiannually, in order to have enough to pay for the boat. How much will each deposit be if the boat costs $12,700? How do I go about this problem and what formula is it that I use. I am very confused. Thanks
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- 12700 = payment times sum for t= 1 to 12 of (1.038)^-t The sum is easy to calculate in closed form: 1.038^(-1/2) times ( (1-(1.038)^(-12) ) / (1 - (1.038)^(-1/2) ) since a + a^2 + ... + a^n = a * (1-a^n) / (1-a) Calculate the value and divide into 12700,
