Question

Rates are 8% p.a. compounded semi-annually.

a. You are going to make 30 monthly deposits of $500 each into your bank account starting in exactly 1 month. How much will you have immediately after the last deposit?

b. You are going to make 30 monthly deposits of $500 each into your bank account starting in exactly 7 months. How much will you have immediately after the last deposit?

c. You made the first of 30 monthly deposits of $500 each into your bank account exactly 7 months ago. How much will you have immediately after the last deposit?

Answer 1

Given Interest rate is 8% per annum compounded semi annually

Let us calculate the monthly rate.

(1+X)^12 = 1.08

Hence X = 0.00643403 = 0.6434%

Let us make the investment schedules for all the 3 options.

a) Investment for 30months starting in 1 month.

Month	Initial Investment	Compounding Factor	Future Value
1	500	1.2044092	602.20
2	500	1.1967096	598.35
3	500	1.1890591	594.53
4	500	1.1814576	590.73
5	500	1.1739047	586.95
6	500	1.1664000	583.20
7	500	1.1589433	579.47
8	500	1.1515343	575.77
9	500	1.1441727	572.09
10	500	1.1368581	568.43
11	500	1.1295903	564.80
12	500	1.1223689	561.18
13	500	1.1151937	557.60
14	500	1.1080644	554.03
15	500	1.1009807	550.49
16	500	1.0939422	546.97
17	500	1.0869488	543.47
18	500	1.0800000	540.00
19	500	1.0730957	536.55
20	500	1.0662355	533.12
21	500	1.0594191	529.71
22	500	1.0526464	526.32
23	500	1.0459169	522.96
24	500	1.0392305	519.62
25	500	1.0325868	516.29
26	500	1.0259856	512.99
27	500	1.0194265	509.71
28	500	1.0129095	506.45
29	500	1.0064340	503.22
30	500	1.0000000	500.00
		Total Future Value	16,487.21

b) 500 deposited starting exactly after 7 months.

Month	Initial Investment	Compounding Factor	Future Value
1	0	1.2597120	-
2	0	1.2516588	-
3	0	1.2436571	-
4	0	1.2357065	-
5	0	1.2278067	-
6	0	1.2199575	-
7	0	1.2121584	-
8	500	1.2044092	602.20
9	500	1.1967096	598.35
10	500	1.1890591	594.53
11	500	1.1814576	590.73
12	500	1.1739047	586.95
13	500	1.1664000	583.20
14	500	1.1589433	579.47
15	500	1.1515343	575.77
16	500	1.1441727	572.09
17	500	1.1368581	568.43
18	500	1.1295903	564.80
19	500	1.1223689	561.18
20	500	1.1151937	557.60
21	500	1.1080644	&nb jeff jeffy Next > < Previous Related Solutions What nominal rate per annum compounded weekly is equal to 9.5% p.a. compounded semi-annually? What nominal rate per annum compounded weekly is equal to 9.5% p.a. compounded semi-annually? Thirteen semi-annual deposits are made earning interest of 6.3​% compounded semi-annually. The size of the first... Thirteen semi-annual deposits are made earning interest of 6.3​% compounded semi-annually. The size of the first deposit is $1600 and the deposits increase at 3.2​% thereafter. a)Determine the total amount deposited b)how much was the accumulated value of the deposits just after the last deposits was made c)what is the size of the 11th deposits d)what is the amount of interest included in the accumulated value a company deposits 3700 a month into an account that earns 9% interacest compounded semi annually... a company deposits 3700 a month into an account that earns 9% interacest compounded semi annually how much money will the company have accumulated in 6 years assume no interperiod compunding You plan to borrow $15,000 for 3 years. The interest rate is 8% compounded semi-annually. The... You plan to borrow $15,000 for 3 years. The interest rate is 8% compounded semi-annually. The terms require you to amortize the loan with equal payments made every period. a) Calculate the amount of payment you would be paying every period? b) Set-up an amortization schedule 1. Assume that all discount rates are 4% per year, and semi-annually compounded. You are given... 1. Assume that all discount rates are 4% per year, and semi-annually compounded. You are given the following semi-annual coupon bond. · Settledate: 1-Jan-2019 · Maturity date: 1-Jan-2024 · Annual coupon rate: 6% · Coupons paid semi-annually · Yield to maturity: 4% · Par value: $1000 Time to maturity: T=5 years - Calculate the bond price using (y + Delta_y) as the bond's yield to maturity. Round to six digits after the decimal - Calculate the bond price using (y... If you make 30 semiannual deposits of $2000 into a fund that earns 10% compounded quarterly,... If you make 30 semiannual deposits of $2000 into a fund that earns 10% compounded quarterly, how much money will be in the fund two years after the last deposit? You are planning to make monthly deposits of $170 into a retirement account that pays 8... You are planning to make monthly deposits of $170 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 21 years? A 25 years $500000 mortgage at 4.30% compounded semi annually is repaid with monthly payment what... A 25 years $500000 mortgage at 4.30% compounded semi annually is repaid with monthly payment what is size of monthly payment and balance of mortgage at end of 6 years and how much did the amortization period shorten by if the monthly payment are increased by $125 at end of year six? A 25-year, $455,000 mortgage at 4.30% compounded semi-annually is repaid with monthly payments. a. What is... A 25-year, $455,000 mortgage at 4.30% compounded semi-annually is repaid with monthly payments. a. What is the size of the monthly payments? b. Find the balance of the mortgage at the end of 6 years? c. By how much did the amortization period shorten by if the monthly payments are increased by $275 at the end of year six? What is the effective rate of interest per semi-annual period equivalent to 8% p.a. compounding annually? What is the effective rate of interest per semi-annual period equivalent to 8% p.a. compounding annually? ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions Respond to the following in a minimum of 175 words: Discuss what elements should be present... 1) The 3rd bright fringe of a double slit interference pattern is 30.0 cm above the... A solar cell generates a potential difference of 0.320 V when a 445.0 ? resistor is... A ceiling fan consists of a small cylindrical disk with 5 thin rods coming from the... You measure the following quantities as A = 1.0 m ± 0.2 m, B = 2.0... Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for... When the electricity goes out on your campus, a backup source powers the servers that handle... ADVERTISEMENT About @ 2020 WizEdu