Answer to Question #215676 in Finance for Anggita

Question #215676

You decide to begin saving toward the purchase of a new car in 5 years. If you put $1.000 at the end of each of the next 5 years in a saving account paying 6 percent compounded annually, how much will you accumulate after 5 years? What would be the ending amount if the payment were made at the beginning of each year? What would be the ending amount if $500 payments were made at the end of each of 6-month period for 5 years and the account paid 6 percent compounded semiannually?

Expert's answer

a $ 1000 1 0.06 1 0.06 $ 5637.10

b $ 1000 1.06 1.06 1.06 1.06 1.06 $ 5975.32

c$ 500 1 0.03 1 0.03 $ 5732.00

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