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sizzzlingd
Oct 30, 2008, 02:55 PM
Hi how would i approach this question? At Jan 01, 2001 i plan to make 5 deposit of $100 each, one every 6 months with the first payment made today. the bank pays a nominal rate of 12% interest but uses semiannual compounding. how much will i have after 10 years?

I tried using the formula FVAD=PMT(FVIA %/m , mn)
FVAD=$100(FVIA 12%/2 , 2x2.5) 2.5 because im making 5 half yearly payments

then i used FVAD=$100(1.06)^5=$133.82

Then is used $133.82(1.06)^15 , 15 for the remaining # of years i wouldnt be making any payments which gave me $320.71

I know this answer is not correct, could you please tell me where i went wrong?