Problema Solution
As part of his retirement planning, Mr. Martin purchases an annuity that pays 5% compounded semi-annually. If the semiannual payment is $10,000, how much will Mr. Martin have saved in 10 years, correct to the nearest whole dollar?
Answer provided by our tutors
A = $10000+$10000(1+2.5%)+$10000(1+2.5%)^2 +...+$10000(1+2.5%)^19
= $255,447
So Mr. Martin have saved $255,447 in 10 years