b. Compute the present value ot each stre
2. Muffin Megabucks is considering two different savings plans. The first plan would have her
deposit $500 every six months, and she would receive interest at a 7 percent annual rate
compounded semiannually
. Under the second plan she would deposit $1,000 every year
with a rate of interest of 7.5 percent, compounded annually. The initial deposit with
Plan I would be made six months from now and, with Plan 2, one year hence.
4. What is the future (terminal) value of the first plan at the end of 10 years?
b. What is the future (terminal) value of the second plan at the end of 10 years?
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