You have been appointed as manager of an investment fund. You have been asked to set up a fund of semiannual payments to accumulate a sum of $40,000,000 at the end of 10 years assuming that the funds can be invested at an annual rate of 9%. The first payment is due six months from now and the last payment at the end of the 10 years.

1.The required semiannual payment is:

$1,058,288

$1,185,793

$1,377,049

$1,275,046

2.How much has been accumulated in the fund after the fourth payment is made (at the end of year 2)?

$5,891,281

$5,454,890

$4,527,558

$5,073,047

3.Suppose that after two years interest rates rise to 11% annual, compounded semiannually. If the amount accumulated at the end of two years from the previous question can be invested at this new rate for the remainder of the investment period, what is its future value at the end of the investment period?

$13,875,514

$10,663,589

$12,847,698

$11,948,359

4.Considering the future value of the first four payments from the previous question and assuming that interest rates for the remaining payments rise to 11% annual, what new payment over the remaining 16 periods will allow the manager to reach the investment goal of $40,000,000?

$914,585

$1,101,909

$1,024,776

$1,190,062