Janet intends to deposit RM300 per year in an ABC credit union for the next 10 y

Question

Janet intends to deposit RM300 per year in an ABC credit union for the next 10 years, and the ABC credit union pays an annual interest rate of 8 percent. Determine the future value Janet will have at the end of 10 years given that end-of-period deposits are made and no interest is withdrawn if:

a. RM300 is deposited annually and the ABC credit union pays interest annually.
b. RM150 is deposited semiannually and the ABC credit union pays interest semiannually.
c. RM75 is deposited quarterly and the ABC credit union pays interest quarterly.

Explanation / Answer

a)FV=300(1+1.08+1.08^2+..+1.08^9)=4345.9 b)FV=150(1+1.04+...+1.04^19)=4466.7 c)FV=75(1+1.02+..1.02^39)=4530.1

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