$500 is the semi-annual deposit.
In order to compute compound interest, multiply the principle of the original loan by the annual interest rate multiplied by the number of compound periods minus one.
Explanation:
Providing the following details:
He expects to pay $3,300 for the all-inclusive holiday package. His bank will pay 6% annually compounded every two years.
Using the following formula, we can determine the semiannual deposit:
FV= [(1+i)n-1]/i A*
A= a semi-annual payment
Separating A:
A=(FV*i)/[(1 + I n]-1
A= {3,000*0.035) / [(1.035^6) - 1]
A= $458
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