How much would you need to deposit into an account that pays 6.5% interest compounded semiannually to have 10000 after 7 years?

Answer 1

If the interest rate is 6.5%/yr compounded semiannually that would equate to 3.25% for 6 months with 14 compounding periods( 2/yr for 7 years)

So our equation would be 10,000= x(1.0325)^14

x= 10,000/(1.0325)^14

X = 6390.56 which is the amount we would have had to deposit to have 10000 at the end of 7 yrs

Hope that helps