How much should you invest now at 8% compounded semiannually to have Br.

10, 000 toward your

brother’s college education in 10 years?

Solution

A = Br. 10, 000 P = Fn(1 + i)-n

t = 10 years = 10, 000 (1.04)-20

m=2 = 10, 000 (0.456387)

n = mt = 20 = Br. 4563.87

r = 8%

i = r/m = 4% = 0.04

p=?