At the end of every six months for 20 years, it gains value with an annual effective interest rate of 10%. Continuous payments are made to a fund as 500, 1000, 500, 1000, …, respectively. Calculate the amount accumulated in the fund at the end of twenty years?

At the end of every six months for 20 years, it gains value with an annual effective interest rate of 10%. Continuous payments are made to a fund as 500, 1000, 500, 1000, …, respectively. Calculate the amount accumulated in the fund at the end of twenty years?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 25P

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The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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