Interest is being compounded semi-annually

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Reference no: EM131813396

Each question is separate they do not combine each other, or there is no question that has to be answered first to solve the another one.

1) Your parents want retirement income of $40,000 per year for 30 years, beginning 21 years from now. They have $20,000 saved so far. How much must they save at the end of each of the next 20 years to meet their goal? The interest rate is 5% compounded annually. Calculate the required annual payment.

2) At what periodic interest rate would $1,000 have to be invested in order to grow to $9,646.29 in 10 years if interest is being compounded semi-annually?

3) Calculate the EAR of $1,000 invested to grow to $9,646.29 in 10 years when interest is being compounded semi-annually.

Reference no: EM131813396

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