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Nonannual Compounding It is now January 1. You plan to make a total of 5 deposits...

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Finance

Nonannual Compounding

It is now January 1. You plan to make a total of 5 deposits of$400 each, one every 6 months, with the first payment being madetoday. The bank pays a nominal interest rate of 12% butuses semiannual compounding. You plan to leave the moneyin the bank for 10 years. Do not round intermediate calculations.Round your answers to the nearest cent.

  1. How much will be in your account after 10 years?

    $ ___________

  2. You must make a payment of $1,992.04 in 10 years. To get themoney for this payment, you will make five equal deposits,beginning today and for the following 4 quarters, in a bank thatpays a nominal interest rate of 12% with quarterlycompounding. How large must each of the five payments be?

    $ _____________

Answer & Explanation Solved by verified expert
3.8 Ratings (447 Votes)
Answer a Number of deposit nper 5 deposits Amount per deposit pmt 400 each Rate r 12 6 semiannual payment beginning of time Fund accumulated after 5    See Answer
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