Ed wants to have $10, 000 in 5 years. He opens a savings account in a bank which pays 7.2% interest compounded monthly. He can either deposit a single lump sum or schedule monthly deposits. Find the amount Ed has to deposit as a single lump sum and the total interest earned. Find the amount of each monthly deposit Ed has to make and the total interest earned.
Ed wants to have $10, 000 in 5 years. He opens a savings account in a bank which pays 7.2% interest compounded monthly. He can either deposit a single lump sum or schedule monthly deposits. Find the amount Ed has to deposit as a single lump sum and the total interest earned. Find the amount of each monthly deposit Ed has to make and the total interest earned.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 1P
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Ed wants to have $10, 000 in 5 years. He opens a savings account in a bank which pays 7.2% interest compounded monthly. He can either deposit a single lump sum or schedule monthly deposits.
Find the amount Ed has to deposit as a single lump sum and the total interest earned.
Find the amount of each monthly deposit Ed has to make and the total interest earned.
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