Compound interest
John is the beneficiary of a trust fund set up for him by his grandmother. If the trust fund amounts to $20,000 earning 8% compounded semiannually and he is to receive the money in equal semiannual installments for the next 15 years, how much will he receive each 6 months?
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Suppose John receive x dollars each 6 months. 15 years is equal to 30 semiyears. The rate of interest is 8% compounded semiannually. The fund is $20,000 at the beginning.
After first 6 months, the trust fund ...
Solution Summary
This shows how to calculate the installments of payout for a trust fund.
$2.49