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Hi Dear, Please can you solve below finance question for me. I
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Hi Dear,

Please can you solve below finance question for me. I look forward to hearing from you soon.


Question-1

Muffin Megabucks is considering two different savings pans. The first plan would have her deposit $500 every six months, and she would receive interest at a 7 percent annual rate, compounding semiannually. Under the second plan she would deposit $1,000 every year with a rate of interest of 7.5 percent, compounding annually. The initial deposit with plan 1 would be made six months from now and, with plan 2, one year hence.

  • What is the future value of the first plan at the end of 10 years?
  • What is the future value of the second plan at the end of 10 years?
  • Which plan should Muffin use, assuming that her only  concern is with the value of her savings at the end of 10 years?

Thanks


a

 

500 0.035 20 $14,139.84 1000 0.075 10 $14,147.09 b c

 

Plan B which gives a higher future value of $14147.09

 







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