A self employed individual, Jimmy Carpenter, is opening a retirement account at a bank. His goal is to accumulate P2,000,000 in the account by the time he retires from work in 20 years. A local bank is willing to open a retirement account that pays 8% interest, compounded semiannually, throughout the 20 years. He wishes to start with a deposit at the end of the end of 1st semiannual and increase the deposit by 4% per semiannual thereafter. What should be the size of his first semiannual deposit? $7,458 $6,275 $10,831 $5,230
A self employed individual, Jimmy Carpenter, is opening a retirement account at a bank. His goal is to accumulate P2,000,000 in the account by the time he retires from work in 20 years. A local bank is willing to open a retirement account that pays 8% interest, compounded semiannually, throughout the 20 years. He wishes to start with a deposit at the end of the end of 1st semiannual and increase the deposit by 4% per semiannual thereafter. What should be the size of his first semiannual deposit? $7,458 $6,275 $10,831 $5,230
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 32P
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Solve the following problems. You must show all your solutions -Draw the cash flow diagram for each problem -use interest rate with five decimal places. -Box your final answer and upload the picture of your complete solution.
Transcribed Image Text:A self employed individual, Jimmy Carpenter, is opening a retirement account at a bank. His goal is to accumulate P2,000,000 in the
account by the time he retires from work in 20 years. A local bank is willing to open a retirement account that pays 8% interest,
compounded semiannually, throughout the 20 years. He wishes to start with a deposit at the end of the end of 1st semiannual and
increase the deposit by 4% per semiannual thereafter. What should be the size of his first semiannual deposit?
A $7,458
B
$6,275
C) $10,831
$5,230
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