Question

1. You plan to make five deposits of $1,000 each, one every 6 months, with the first payment being made in 6 months. You will then make no more deposits. If the bank pays 7% nominal interest, compounded semiannually, how much will be in your account after 3 years? Round your answer to the nearest cent.
   $  

2. One year from today you must make a payment of $11,000. To prepare for this payment, you plan to make two equal quarterly deposits (at the end of Quarters 1 and 2) in a bank that pays 7% nominal interest compounded quarterly. How large must each of the two payments be? Round your answer to the nearest cent.

Answer 1

Q1.
Period	Deposits	FVF @ 3.5%	Future value
1	1000	1.187686	1187.686
2	1000	1.147523	1147.523
3	1000	1.108718	1108.718
4	1000	1.071225	1071.225
5	1000	1.035	1035
6	0	1	0
Future value			5550.15
Q2.
Period	Deposits	FVF at 1.75%	Future values
1	x	1.053424	1.053424x
2	x	1.035306	1.035306x
3	0	1.0175	0
4	0	1	0
Future values			2.08873x
As per question, equation is:
2.08873x = 11000
x= 5266.36
Quarterly payment is $ 5266.36