2. 1 2 3. 4 6. 7. 8. 10 EOY 20 21 22 23 24 25 26 27 28 29 30 CF $300 $270 $240 $210 $180 Five deposits are made at the EOYS of years 2021-2025, as shown in the CF table above. If the interest rate is 6% compounded annually, what is the amount in the account at the end of 2030? 6,

2. 1 2 3. 4 6. 7. 8. 10 EOY 20 21 22 23 24 25 26 27 28 29 30 CF $300 $270 $240 $210 $180 Five deposits are made at the EOYS of years 2021-2025, as shown in the CF table above. If the interest rate is 6% compounded annually, what is the amount in the account at the end of 2030? 6,

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 36P

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Question

No in excell please

2.
1
4
8
10
EOY
20
21
22
23
24
25
26
27
28
29
30
CF
$300 $270 $240 $210 $180
Five deposits are made at the EOYS of years 2021-2025, as shown in the CF table above. If the interest rate is 6% compounded annually, what is
the amount in the account at the end of 2030?

Expert Solution

Step 1

Compounding interest refers to earning interest not only on principal amount but also on interest amount, i.e earning interest on interest. compounding interest is calculated on the principal and also the accumulated interest on the loan or deposit. Therefore compounding concept is more useful for the investors and it is not advantageous in case of borrowers. This is different from simple interest where it earns fixed or flat rate of interest over the period of time. Compounding may be daily, weekly, monthly, quarterly, half-yearly, annually and continuously.

It may be done continuously, daily, weekly, monthly, semi-annually, annually.. Read more at: https://www.fincash.com/l/power-compound-interest

It may be done continuously, daily, weekly, monthly, semi-annually, annually. Read more at: https://www.fincash.com/l/power-compound-interest

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