Answer to Question #110930 in Financial Math for Lerie

Question #110930

The UFS estimates that they will need $450000 in one and a half year's time and another $720000 in two and a half years' time to cover the expected cost of providing each registered student with a Kovsie dairy. If interest is calculated at 6.4% per annum, compounded semi-annually, how much must the UFS invest today in order to cover the expected future costs?

Expert's answer

"\\frac{450 000}{(1+\\frac{6.4}{2})^{1.5\\times2}}+\\frac{720 000}{(1+\\frac{6.4}{2})^{2.5\\times2}}=409 424.117+615083.403=1 024 507.52"