The following beginning-of-month (BOM) and end of month (EOM) amounts are to be deposited in a savings
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The following beginning-of-month (BOM) and end of month (EOM) amounts are to be deposited in a savings account that pays interest at 9% compounded monthly:
Today (BOM 1) $400
EOM2 270
EOM6 100
EOM7 180
BOM 10 200
Set up a spreadsheet to calculate the account balance at the end of first year (EOM12). The spreadsheet must include the following column headings: Month Number, Deposit BOM, Account Balance at BOM, Interest Earned in Each Month, Deposit EOM, Account Balance at EOM. Also, use the compound interest tables to draw a cash flow diagram of this problem and solve for the account balance at the EOM 12.
Compound InterestCompound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. Thought to have originated in 17th century Italy, compound...
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i NIR m 912 075mo F 12 400 FP 075 12 270 FP 075 10 ...View the full answer
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