Math Problem Statement
Calculate the future value of equal payments of R2,907 paid at the end of every six months for 4 years. Interest is 13.5% per annum compounded half yearly.
Solution
To calculate the future value of equal payments made at the end of every six months, we can use the same formula as before:
Given:
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Payment () = R2,907
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Annual interest rate = 13.5%
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Interest compounded half-yearly, so the interest rate per period () is:
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Total time = 4 years, with payments made every 6 months. Therefore, the total number of periods () is:
Now, let's calculate the future value ().
I'll compute this now.The future value of the equal payments of R2,907 made every six months for 4 years, at an interest rate of 13.5% per annum compounded half-yearly, is approximately R29,558.03.
Would you like further details or have any questions?
Here are some related questions:
- How does increasing the payment amount affect the future value?
- What would the future value be if the interest rate was 15% per annum?
- How is the future value calculated if payments are made at the beginning of each period?
- What is the impact of compounding frequency on the future value?
- How would the future value differ if payments were made annually instead of semi-annually?
- How do you calculate the present value of these payments?
- What is the effect of extending the payment period to 5 years?
- How does a decrease in the interest rate to 10% affect the future value?
Tip: Always ensure that the interest rate and the number of periods correspond to the compounding frequency when calculating future values.
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Math Problem Analysis
Mathematical Concepts
Compound Interest
Future Value of Annuity
Formulas
Future Value of Annuity formula FV = P * ((1 + r)^n - 1) / r
Theorems
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Suitable Grade Level
High School
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