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14. Billy thinks he can save enough to deposit $1,200 in the bank at the end of each year for the next 30 years. a)

14. Billy thinks he can save enough to deposit $1,200 in the bank at the end of each year for the next 30 years.

a) How much will he have if the bank pays 6% interest, compounded annually?

b) If instead, Billy can deposit $100 per month in the bank, and the bank compounds interest monthly, how much will Billy have at the end of 30 years? What is the effective annual interest rate (EAR) that Billy will be earning?

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