::: vuaskari.com ::: Mth 302 Ques 3

Salam,

I have try to solve this if anyone can check or compare it with your answer and please tell me is it correct or not.

DV=A=r(1-1/(1+i)^n/i

i=12/4=3

n=15/4=3.75

Dv=10,000(1-1/(1+.03)^3.75/.03)

   = 10,000(1-1/(1.03)^125)

   = 10,000(1-1/.0248)

   = 10,000(.975)

   = 9751.48

 I have used this example to solve this question:

How much money deposited now will provide payments of Rs. 2000 at the end of each halfyear

for 10 years if interest is 11% compounded six-monthly.

Amount of annuity = 2000Rs

Rate of interest = i = 11% / 2 = 0.055

Number of periods = n = 10 × 2 = 20

DISCOUNTED VALUE = 2,000 x ((1-1 / (1+0.055)^20) / 0.055)

= 2,000 x11.95

=23,900.77

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