Dillion Savage (sounds like a romance novel name---he is really a music teacher) decides to make semiannual $5000 deposits into an account which pays 5% compounded semiannually. If his first deposit is on January 1, 2021, then how much is in the account immediately after the deposit on January 1, 2030? (Don’t forget the PV is period before the first payment)
Dillion Savage (sounds like a romance novel name---he is really a music teacher) decides to make semiannual $5000 deposits into an account which pays 5% compounded semiannually. If his first deposit is on January 1, 2021, then how much is in the account immediately after the deposit on January 1, 2030? (Don’t forget the PV is period before the first payment)
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 61P
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Question
Dillion Savage (sounds like a romance novel name---he is really a music teacher) decides to make
semiannual $5000 deposits into an account which pays 5% compounded semiannually. If his first deposit is on
January 1, 2021, then how much is in the account immediately after the deposit on January 1, 2030?
(Don’t forget the PV is period before the first payment)
Expert Solution
Step 1
Given,
Semi annual payments PMT = $5000
Semi annual Interest (r) = 5%
Time = 9 Years (January 1 2021 - January 1 2030)
Total Payments N = 9 *2 = 18
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