Good morning good people!, juriemagic here..again...oops!

Here is your time line.  5 deposits of   Y units each is made as shown  (I should have used x)

All times must be converted to months.

interest rate is  7.2% / 12 month = 0.6 % per month = 0.006 per month

i=0.006

1+i = 1.006

Now you have to look at what each of these will grow to independently and add them all together.

\(FV=Y*1.006^{48}+Y*1.006^{36}+Y*1.006^{24}+Y*1.006^{12}+Y*1.006^{0}\\ 20000=Y*1.006^{48}+Y*1.006^{36}+Y*1.006^{24}+Y*1.006^{12}+Y\\ 20000=Y(1.006^{48}+1.006^{36}+1.006^{24}+1.006^{12}+1)\\ 20000=Y*5.801723086\\ Y=20000\div5.801723086\\ Y=3447.25\; units\)

So each deposit is R 3447.25

I figure the R must stand for either Real (Brazil) or Rand (South Africa)

I am thinking Rand because you appear to have English as a primary language.

Are you from South Africa?     

Hi Juriemagic,

I assume you have been given formulas.

Have you been given a formula called

Future value of an ordinary annuity

as well as one called

Future value of an annuity due?

Maybe you have only been given the first one, or less likely, are you suppose to do it without either of these formula?

The easiest formula is future value of an annuity due but if you don't have it we can use future value of an ordinary annuity almost as easily.

Let me know, and perhaps enter the formula that you are given, and I will then continue.    

Good day Melody!!,

There were no formulas given. I would imagine the formula A=P(1+i)^n must be used?...I just do not know how to interpret the question, so as to know where to start with this...I really hope you can help. Thank you kindly Melody..

Hi Juriemagic,

I remember seeing this question before and I though I commented the first time round.

I think something is missing from your question.

You have twqo unknowns.

The first that you are trying to find is the regular 4 yearly deposit.

BUT

You know that the investment grows to 20,000 but you are not told how long ths will take. You need to know how long it will take to grow to 20,000 before you can work out a money value for the regular 4 yearly deposit.

Are you given a time anywhere?

Melody,

This is where my problem lies. a Hint is given to use a timeline. So what I did was draw the timeline, then used T0 as the "now", but also presuming its at the END of the year. Then comes end of year 1 (T1), (which is the end of the next year), at which time another investment is made. So, the first investment is now in the bank for a year, the second, only a day. BUT...this second investment counts for the first year of the 4 years, because the question is worded saying, "NOW, AND AT THE END OF EVERY YEAR FOR 4 YEARS"..so, I'm thinking the total years, is 5. BUT then, if an investment is made at the end of this (4th,5th) year, it really is also the end of the timeline, so this investment is not going to grow...

I agree, this question is way out of line!!!..so to speak. what do you think?

Sorry Juriemagic,

I justr read your question for the 100th time only this time I read it properly and it does seem to make sense.

Hang on a bit and I will try to get you and answer.

Guest may be right, I have not looked at what guest has said and i have not done the question myself yet.

More to come.....   

hi Melody,

Yes, you've guessed it!!..good ol' SA..

and you Melody?...

to come back to the question, uhm, just wondering...do you think the answer would be R3447.25?..it just seems a bit odd that someone would deposit such an amount 5 times...but then again, it's just a sum...

BUT there is something...as the last deposit was made at the end of the 5th year, don't you think we should add a year for this last investment to grow, so at the end of year 6 we actually, only then have R20 000?..

Not expecting you to brainstorm this anymore, you have helped already. I was only wondering about that?

The question is not worded very well but I think it means:

what will it be worth at the end of the 4th year AFTER the 5th deposit is made.

I am from Sydney, Australia.

What city are you from?

Sydey...well at least I know what the dot of Sydney looks like on a map!!!..haha

Witbank, or the new african name is Emahlahleni..been here just over a year now...work at the Ridge casino..

Thanks,

Well i looked that up so I know just a tiny bit more about your region than a dot on a page.  Emahlahlena, (meaning coal) that is actually a pretty name when I settled on how it might be pronounced.  Witbank is a lot easier to remember and spell though.  :)

https://www.google.com.au/maps/place/Witbank,+South+Africa/@-24.4268839,24.7728635,6z/data=!4m2!3m1!1s0x1eeae8d3974f9ce9:0xcf04138bd6fd111c

I checked this thread every 10 minutes to see if you replied!!..

Yes I prefer Witbank, I still call it that.

anycase, I'm going of soon for my weekend...will catch you again sometime!!!

I already responded to this but it obviously did not post properly.

Have a great weekend and I will see you later.  :))