Question
For bonds, assume coupons paid semi-annually, coupon rates and yields quoted with semi- annual compounding, and redeemable at par unless otherwise noted (Ignore it if
For bonds, assume coupons paid semi-annually, coupon rates and yields quoted with semi- annual compounding, and redeemable at par unless otherwise noted (Ignore it if it's not relevant to the question).
1. Find how long $50,000 should be left to accumulate at a 8% effective rate in order to exceed $150,000.
2. A family wishes to accumulate $200,000 in a college education fund at the end of 12 years. If they deposit $10,000 in the fund at the end of each of the first 10 years and $10,000 + X at the end of each of the last two years, find X if the fund earns 5% effective.
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