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Question 4.P.6: Repeat Problem 4.5 using quarterly compounding....

Repeat Problem 4.5 using quarterly compounding.

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F  =  \$1000\frac{(1  +  0.10/4)^{(4)(20)}  –  1}{0.10/4}  =  \$1000\frac{6.20957}{0.025}  =  \$248  382.80

Note that this is much less than the value obtained using monthly compounding.

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