Plan to make six equal annual deposits

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Reference no: EM131815180

You plan to make six equal annual deposits of $5,000. The first deposit will be made one year from now.

A bank offers two savings accounts with interest rates as follows:

Account A: stated annual rate of 12% with semi-annual compounding

Account B: stated annual rate of 11.75% with quarterly compounding

Which account would you choose? Why? If you keep the deposits in the chosen account, how much money will you have 20 years from now?

Reference no: EM131815180

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