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How much will be in the person''s account after 10 years

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Reference no: EM132396717

Please explain the following procedures for the following:

a. An individual plans to make 5 deposits of $400 each, one every 6 months, with the first payment made today. The bank pays a nominal interest rate of 8%, but utilizes semiannual compounding. The individual will leave the money in the bank for 10 years. How much will be in the person's account after 10 years?

b. The person must make a payment of $1,322.68 in 10 years. To acquire the money for this payment she will make 5 equal deposits, beginning today and for the following 4 quarters to a bank that pays a nominal interest rate of 10% with quarterly compounding. How large must each of the five payments be?

Reference no: EM132396717

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