Question

Today you are just notified that you won a prize that gives you a total of...

Today you are just notified that you won a prize that gives you a total of 8 cash awards of $5,000 each, one every 6 months with the first award being made today. You decide to save each of them in the bank and after the last cash award keep all the money saved until a future date. The bank pays a nominal interest rate of 13% but uses semiannual compounding. How much your account with the bank be if you leave the money in the bank to be withdrawn all in 11 years from today?

Do not use the $ sign. Use commas to separate thousands. Use to decimals. Round to the nearest dollar. For example if you obtain $1,432.728 then enter1,433;  if you obtain $432.00 then enter 432

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Answer #1
Particulars Amount
Annuity payment                 5,000
× FVAF 8 payments          10.73185
Future value in 4 years              53,659
× FVF for 7 years            2.41487
Future value in 11 years      129,580.36

Answer is $129,580.36

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