How much money should be deposited today in an account that earns 7% compounded semiannually so that it will accumulate to $11,000 in three years?The amount of money that should be deposited is $ N(Round up to the nearest cent.)​

Accepted Solution

Answer:$8950.37Step-by-step explanation:Use the compound amount formula A = P(1 + r/n)^(nt), in which P is the initial amount of money (the principal), r is the interest rate as a decimal fraction, n is the number of times per year that interest is compounded, and t is the number of years.Here we have A = $11,000, n = 2, r = 0.07 and t = 3, and so:$11,000 = P(1 + 0.07/2)^(2*3), or$11,000 = P (1.035)^6                                            $11,000        $11,000Solving for P, we get P = ---------------- = ------------- = $8950.37                                             1.035^6          1.229Depositing $8950.37 with terms as follows will result in an accumulation of $11,000 after 3 years.