You are considering an investment in a bank account that pays an interest rate of 18% p.a. compounded monthly. You decide to invest $796.30 at the end of each six months and would like your account to grow to $38,000. You want to find out how many semi-annual payments you need to contribute. Answer the following questions, and choose the closest answer from the possible choices following each question:

This question is an example of ___________ (Answer: General Annuities Dues, Ordinary Simple Annuities, Ordinary General Annuities, or Simple Annuities Dues)

Answer 1

Choose...

Which TVM variable in the financial calculator should be set equal to zero when solving for the number of payments?

Answer 2

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How many semi-annual payments would it require for your account to grow to $38,000?

Answer 3

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The investments effective annual rate is __%.

Answer 4

Choose...

The effective interest rate over one payment interval is __%.

Answer 5

Choose...

What would be the size of each semi-annual payment if you would like your account grow to $38,000 in 5 years?