Suppose you deposit $4,000 at the end of each quarter for five years at an interest rate of 8% compounded monthly. Which of the formulas given next will determine the equal annual end-of-year deposit amount that would accumulate the same balance over five years, under the same interest compounding, as the $4,000 deposited quarterly?(a) A= ($4,000 (FIA, 2.01%,20)] x (AIF, 8%, 5).(b)A = $4,000 (FIA, 9%, 5).(c) A= $4,000 (FIA, 9%, 20) x (AIF, 9%, 5).(d) None of the above.
Suppose you deposit $4,000 at the end of each quarter for five years at an interest rate of 8% compounded monthly. Which of the formulas given next will determine the equal annual end-of-year deposit amount that would accumulate the same balance over five years, under the same interest compounding, as the $4,000 deposited quarterly?(a) A= ($4,000 (FIA, 2.01%,20)] x (AIF, 8%, 5).(b)A = $4,000 (FIA, 9%, 5).(c) A= $4,000 (FIA, 9%, 20) x (AIF, 9%, 5).(d) None of the above.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose you deposit $4,000 at the end of each quarter for five years at an interest rate of 8% compounded monthly. Which of the formulas given next will determine the equal annual end-of-year deposit amount that would accumulate the same balance over five years, under the same interest compounding, as the $4,000 deposited quarterly?
(a) A= ($4,000 (FIA, 2.01%,20)] x (AIF, 8%, 5).
(b)A = $4,000 (FIA, 9%, 5).
(c) A= $4,000 (FIA, 9%, 20) x (AIF, 9%, 5).
(d) None of the above.
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