You have been accepted to study international economy at the European

You have been accepted to study international economy at the European Central Bank (ECB) in
Frankfurt. You will need $10,500 every 6 months (beginning today) for the next three years to cover
tuition and living expenses.

Mom and Dad have agreed to pay for your education, and want to
make one deposit today in a bank account earning 6% interest, compounded semiannually. How
much must they deposit now so that you can withdraw $10,500 at the beginning of each semester
over the next 3 years?
A) $55,797 B) $54,187 C) $58,587 D) $56,639

ANSWER

C