Question
Your bank account pays a nominal interest rate of 6%, compounded daily. Your plan is to deposit $500 in the account today, and deposit $1,000
Your bank account pays a nominal interest rate of 6%, compounded daily. Your plan is to deposit $500 in the account today, and deposit $1,000 in the account at the end of each of the next three years. How much will you have in the account at the end of three years, after making your final deposit? (Hint: The cash flow streams and the interest rate compounded are different. Thus, EAR: Effective Annual Rate should be used)
I know i need to solve for the Future Value, but i dont know how the I
Pv=500
fv= ?
pmt=-1000
n= 3 *365
I= not sure i think it has to do with the [1+6%/365]-1
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started