a. It is now January 1. You plan to make 5 deposits of $100 each, one every
Question:
a. It is now January 1. You plan to make 5 deposits of $100 each, one every 6 months, with the first payment being made today. If the bank pays a nominal interest rate of 12 percent but uses semiannual compounding, how much will be in your account after 10 years?
b. You must make a payment of $1,432.02 ten years from today. To prepare for this payment, you will make 5 equal deposits, beginning today and for the next 4 quarters, in a bank that pays a nominal interest rate of 12 percent, quarterly compounding. How large must each of the 5 payments be?
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a Begin with a time line b 6mos 0 Years 0 or 0 1 2 1 3 3 JN 2 4 5 6 L I I I I 100 100 100 100 100 FV...View the full answer
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Related Book For 
Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
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