You consider paying equal amounts of money into a bank account at regular intervals for Q4. 10 years. As a result of your research, you find out the following payment plans: a. To pay $500 at the end of each month for a period of 10 years with an interest rate 12% compounded monthly. b. To deposit $1500 at the end of every three months with an interest rate of 12% compounded continuously for 10 years. c. To deposit $1000 at the end of every two months with an interest rate 12% compounded quarterly for 10 years. For each of these payment plans, calculate the amount of money that will be accumulated in your account at the end of the 10th year (including the last payment). Which alternative would be more advantageous for you?

You consider paying equal amounts of money into a bank account at regular intervals for Q4. 10 years. As a result of your research, you find out the following payment plans: a. To pay $500 at the end of each month for a period of 10 years with an interest rate 12% compounded monthly. b. To deposit $1500 at the end of every three months with an interest rate of 12% compounded continuously for 10 years. c. To deposit $1000 at the end of every two months with an interest rate 12% compounded quarterly for 10 years. For each of these payment plans, calculate the amount of money that will be accumulated in your account at the end of the 10th year (including the last payment). Which alternative would be more advantageous for you?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 2STP

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