Al estimates that he will need $29,000 for new equipment in 15 years. Al decided that he would put aside the money now so that in 15 years the $29,000 will be available. His bank offers him 10 percent interest compounded semiannually. what Al must invest today?

Question

Al estimates that he will need $29,000 for new equipment in 15 years. Al decided that he would put aside the money now so that in 15 years the $29,000 will be available. His bank offers him 10 percent interest compounded semiannually.  what Al must invest today?

anonymous · Answer

29000/(1+.1/2)^30=6709.95   ?

dumbcow · Answer

yep, that is correct

anonymous · Answer

thank you for answering, i only have an hour left to do my test lol

dumbcow · Answer

btw i didn't get your other question about a loan on a 120 day note

what is the U.S. Rule?

anonymous · Answer

i have no idea lol. i didnt pass my test. i told my instructor that the tutors didnt provide help that acutally helped me and he told me that was too bad. ill look in my bokok again and see if i can find the us rule.

anonymous · Answer

the US rule states that any partial loan payment first covers any interest that has built up.

dumbcow · Answer

ok $5000 at 5% percent  is $250 of interest due

After payment of 500, which covers the interest and pays 250 of the principal
the remaining balance is $4750