1) You wish to purchase a house within three years, and you are presently saving for down payment. You plan to keep $8,000 at the end of first year, and you expect that your annual savings will rise by 20% annually thereafter. Your expected annual return is= 6%. How much would you have for the down payment at the ending of Year 3?
2)a) You plan to create 5 deposits of= $1,000 each, one every six months, with first payment being made in six months. You will then create no more deposits. If bank pays= 3% nominal interest, compounded semi-annually, find how much will be in your account after three years?
b) 1 year from today you should make a payment of= $7,000. To make this payment, you plan to make two equivalent quarterly deposits (at the ending of Quarters 1 and 2) in the bank which pays 3% nominal interest compounded quarterly. How large should each of 2 payments be?