Assume that you agree with a venture capitalist that you will pay her $1.557 million 3.5 years from now for her investment in your invention. She requires you to set aside an amount of money semiannually, starting now, to ensure for the $1.557 million payment. She knows a bank in Switzerland where you can get 6% per year, compounded semiannually. Assume deposits are due at the beginning of semiannual period (so seven deposits are made). What is the required semiannually amount you must set aside in that bank starting today? Suggestion: Consider using the CFD shown to the right.
