Question

A corporate treasurer wishes to accumulate a total of 25,000,000 thirty years from today. He plans to make equal semiannual deposits into an account earning 8% compounded semiannually. What must be the amount of these deposits if the first deposit will be made three and one- half years from today and the last deposit will be made six months before the 25000,000 is needed?

Answer 1

FVAnnuity Due = c*(((1+ i)^n - 1)/i)*(1 + i )

C = Cash flow per period

i = interest rate

n = number of payments

25000000= Cash Flow*(((1+ 8/200)^(26.5*2)-1)/(8/200))*(1+8/200)

Cash Flow = 137479.45