Assume that 1 year from now you plan to deposit $1000 in a savings account that pays

Question:

Assume that 1 year from now you plan to deposit $1000 in a savings account that pays a nominal rate of 8%.
(a). If the bank compounds interest annually, how much will you have in your account 4 years from now.
(b) What would your balance be 4 years from now if the bank used quarterly rather than annual Suppose you deposited the $1000 in 4 payments of $250 each at the year 1, 2, 3, and 4. How much would you have in your account at the end of Year 4, based on 8% annual Suppose you deposited 4 equal payments in your account at the end of Years 1, 2, 3, and 4. Assuming an 8% interest rate, how large would each of your payments have to be for you to obtain the same ending balance as you calculated in part a?
Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...