Question
A bank is offering a savings account with an annual interest rate of 8% compounded semiannually. Jason and Kevin are both hoping to have $10,000
A bank is offering a savings account with an annual interest rate of 8% compounded semiannually. Jason and Kevin are both hoping to have $10,000 saved up at the end of the next 5 years. Jason plans to open an account and make equal deposits at the end of each semi-annual period . Kevin plans to open an account and make equal deposits at the start of each semi-annual period .
FV=Payment(1+rn)nt1rn , FV=Payment(1+rn)nt1rn(1+rn)
How much money should Jason deposit at each semi-annual payment?
How much money will Jason pay into this account in total over the 5 year period?
How much money should Kevin deposit at each semi-annual payment?
How much money will Kevin pay into this account in total over the 5 year period?
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