Question

30. You plan to make five deposits of $1,000 each, one every 6 months, with the first payment being made in 6 months. You will then make no more deposits. If the bank pays 6% nominal interest, compounded semiannually, how much will be in your account after 3 years? Do not round intermediate calculations. Round your answer to the nearest cent. $

One year from today you must make a payment of $9,000. To prepare for this payment, you plan to make two equal quarterly deposits (at the end of Quarters 1 and 2) in a bank that pays 6% nominal interest compounded quarterly. How large must each of the two payments be? Do not round intermediate calculations. Round your answer to the nearest cent. $

Answer 1

A/c balance after 3 years Px[(1+r)^n-1]=r Here, 6% A Interest rate per annum B Number of years C Number of payments per per annum A:C Interest rate per period (r) BxC Number of periods (n) Payment per period (P) 2 3% 1,000 A/c balance after 3 years $ 6,468.41 1000x((1+3%)^6-1):3%

Deposit in each quarter (P) FVA:([(1+r)^n-1]=r) Here, 6% A Interest rate per annum B Number of years C| Number of payments per per annum A:C Interest rate per period (r) BxC Number of periods (n) Future value of annuity (FVA) 0.5 4 1.5% 2 8,796.52 =9000/(1+1.15%)^2 Deposit in each quarter (P) $ 4,365.52 8796.52:(((1+1.5%)^2-1):1.5%)

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