Certain operating savings are expected to be 0 at the end of the first six months, to be $1,000 at the end of the second six months, and to increase by $1,000 at the end of each six-month period thereafter, for a total of four years.

a. Draw the cash flow diagram.

b. It is desired to find the equivalent uniform amount, A, at the end of each of the eight six-month periods if the nominal interest rate is 20% compounded semiannually