It is now January 1. You plan to make a total of 5 deposits of $500 each, one ev

Question

It is now January 1. You plan to make a total of 5 deposits of $500 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 8% but uses semiannual compounding. You plan to leave the money in the bank for 5 years. How much will be in your account after 5 years? Round your answer to the nearest cent. $ b. You must make a payment of $1,990.71 in 10 years. To get the money for this payment, you will make 5 equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 12% with quarterly compounding. How large must each of the 5 payments be? Round your answer to the nearest cent.

Explanation / Answer

Answer:- Using a financial calculator, you have 5 payments(n=5),7% interest rate (14/2, since its semi annual.so I/Y=7), 0 present value(PV=0),300 payment(PMV= 300), and you CPT for future value..

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