Question

*WORK SHOWN*

Answer 1

P=630
I=3.05%/12=0.002541667
N=12
T=6

What am I doing wrong ?

Answer 2

Madeline and Jonathan want to purchase a home in five years. They will contribute $630 every six months to a savings account with 3.05% interest, compounded monthly. What is the future value of this investment, when Madeline and Jonathan need to make a down payment?

$1,494.40

$6,796.45

$6,813.72

$40,778.67

My Work : http://www.wolframalpha.com/input/?i=FVOA%3D630*%28%281%2B0.002541667%29%5E%2812*6%29-1%29%29%2F%280.002541667%29

Answer 3

Since interest is compounded monthly, but savings are only made semi annually, something has to give. The formula for the Future Value of an Annuity of $630, with 10 semi annual payments, requires a semi annual interest rate, not a monthly rate.

An annual rate of 3.05%, compounded monthly, results in an EAR of 3.093%; a semi annual EAR of 1.5347%. The FV of an Annuity of 630, N 10, R 1.5347%, is 6,753.38.

Answer 4

The closest answer to that is $6,796.45

Answer 5

Thats yahooo -.-