Compoundng Interest : Determining Amount to Deposit to get Desired Return

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

If I wanted to set up a trust earning 9% compounded semi-annually so that I could withdraw $10,000 every six months, begining six months from now, for 6 years. How would I determine the amount to deposit now?

© BrainMass Inc. brainmass.com February 24, 2021, 2:37 pm ad1c9bdddf
https://brainmass.com/business/interest-rates/amount-deposit-desired-return-32992

Solution Preview

Suppose I deposit x dollars, earning 9% compounded semi-annually interest.
After 6 months, the balance is x(1+9%). And I withdraw $10,000.
So the balance is ...

Solution Summary

The amount of a feposit to get a desired return under compounding interest is found. The solution is detailed.

$2.19