I will invest $500 per quarter for my retirement at 7.3% compounding quarterly for 32 years. I have a choice of making that payment of $500 at the beginning or the end of the quarter (regular annuity or annuity due). In which account will I have more money and by how much? Which account will earn the most interest and by how much?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....
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 I will invest $500 per quarter for my retirement at 7.3% compounding quarterly for 32 years. I have a
choice of making that payment of $500 at the beginning or the end of the quarter (regular annuity or
annuity due). In which account will I have more money and by how much? Which account will earn the
most interest and by how much?  
Ans: Regular Annuity‐ $249981.20, Interest = $185981.20; Annuity Due‐ $254543.36, Interest =
$190543.36

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