Question
Exactly 5 years ago, Y made the first of several semi-annual deposits in the bank earning interest at the rate of 8% p.a. effective. Each
Exactly 5 years ago, Y made the first of several semi-annual deposits in the bank earning interest at the rate of 8% p.a. effective. Each of these deposits was $1,000. The last deposit occurred a few minutes ago. This bank account will fund a series of withdrawals. These will occur annually with the first in exactly 1 year. There will be a total of 12 withdrawals. Each of the first 6 will be for the same amount. Each of the remaining 6 will be exactly twice the amount of each of the first 6. (E.g. if the first 6 are for $1,000 each then each of the remaining 6 will be $2,000). If interest rates are now changing to 8% p.a. compounded semi-annually, what are the magnitudes of the withdrawals?
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