Problem:
Jean Cleveland currently has $7,750 in a money market account paying 7.25 percent compounded semi-annually. She plans to use this amount and her savings over the next 5 years to make a down payment on a townhouse. She estimates that he will need $20,000 in 5 years.
Required:
Question: How much should she invest in the money market account semi-annually over the next 5 years to achieve this target?
a. $ 886.28
b. $ 757.25
c. $ 650.97
d. $ 610.79
Note: Please show how you came up with the solution.