Question

Benjamin set up a fund that would pay her family $4,500 at the beginning of every month, in perpetuity. What was the size of the investment in the fund if it was earning 5.50% compounded semi-annually?

Name: Benjamin set up a fund that would pay her family 4,500 at the beginning of every month, in perpetuity. What was the size of the investment in the fund if it was earning 5.50% compounded semi-annually?
Uploaded: 2023-06-22T19:52:14-08:00
Duration: 2 min 17 s
Channel: Zack A
Description: Benjamin set up a fund that would pay her family 4,500 at the beginning of every month, in perpetuity. What was the size of the investment in the fund if it was earning 5.50% compounded semi-annually?

          Benjamin set up a fund that would pay her family $4,500 at the beginning of every month, in perpetuity. What was the size of the investment in the fund if it was earning 5.50% compounded semi-annually?

Benjamin set up a fund that would pay her family 4,500 at the beginning of every month, in perpetuity. What was the size of the investment in the fund if it was earning 5.50% compounded semi-annually?

Added by Patrick R.

Elementary and Intermediate Algebra

Alan S. Tussy, R. David Gustafson 5th Edition

Instant Answer

Solved by Expert Zack A

06/22/2023

Step 1

50% compounded semi-annually, so the effective interest rate per month is: $$r = (1 + \frac{0.055}{2})^{2/12} - 1$$ $$r = 0.00454$$ Show more…

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Benjamin set up a fund that would pay her family $4,500 at the beginning of every month, in perpetuity. What was the size of the investment in the fund if it was earning 5.50% compounded semi-annually? Round to the nearest cent