How much money should be deposited today in an account that earns 7% compounded semiannually so that it will accumulate to $12,000 in four years?

Given rate is = 7% or 0.07

Total amount needed = $12000

Time = 4 years

Here, the  deposit is  compounded semiannually, means twice per year and this gives 8 annual compounding periods in 4 years.

The equation becomes:

P=

P =

Solving it, we get P = $ 9112.93

Hence $9112.93 should be deposited today.

a. -0.3 > -0.33

b.   e = 7.5h

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