Jake deposits 5000 at the end of each year in an investment fund earning an annual...

Jake deposits 5000 at the end of each year in an investment fund earning an annual effective interest rate of 11.6%. The interest from this investment fund is paid at the end of each year into a savings account which earns an annual effective interest rate of 2.1%.

Find Jake's combined total accumulated value at the end of 16 years.

Solutions

Expert Solution

Solution:

Jake deposits at the end of each year is ,R = 5000

Effective interest rate , i = 11.6% = 0.116

Total amount to be accumulated after 16 years is .

Amount accumulated after 1st year is

Interest earned in 1st year

Earned interest deposited in savings account with interest rate of 2,1 %

i = 0.021

Total amount accumulated in savings account after 16 years is ,

jakes combined total accumulated value at the end of 16 years is ,

orchestra answered 1 year ago

Next > < Previous

Related Solutions

Jake deposits 5000 at the end of each year in an investment fund earning an annual...

Jake deposits 5000 at the end of each year in an investment fund earning an annual effective interest rate of 11.6%. The interest from this investment fund is paid at the end of each year into a savings account which earns an annual effective interest rate of 2.1%. Find Jake's combined total accumulated value at the end of 16 years.

Bob deposits $11000 at the beginning of each year for six years in a fund earning...

Bob deposits $11000 at the beginning of each year for six years in a fund earning an effective annual rate of 6.7%. The interest from this fund can only be reinvested at an effective annual rate of 2.1%. Find the accumulated value of Bob’s investment at the end of thirteen years. Round your answer to the nearest cent.

A loan of $5000 is repaid with annual payments at the end of each year of...

A loan of $5000 is repaid with annual payments at the end of each year of $1200,$800,$1300 and X. Assume the loan has 10% effective interest per year. a) Determine X b) Determine the amount of interest paid with the third payment.

If a business manager deposits $60,000 in a bond fund at the end of each year...

If a business manager deposits $60,000 in a bond fund at the end of each year for twenty years, what will be the value of her investment: a. At a compounded rate of 6 percent? b. At a compounded rate of 4 percent? What would the outcome be in each case if the deposits were made at the beginning of each year?

Rachael deposits $3,600 into a retirement fund each year. The fund earns 7.5% annual interest....

Rachael deposits $3,600 into a retirement fund each year. The fund earns 7.5% annual interest, compounded monthly. If she opened her account when she was 20 years old, how much will she have by the time she’s 55? How much of that amount was interest earned?

A woman deposits $14,000 at the end of each year for 10 yearsin an investment...

A woman deposits $14,000 at the end of each year for 10 years in an investment account with a guaranteed interest rate of 4% compounded annually. (a) Find the value in the account at the end of the 10 years. (b) Her sister works for an investment firm that pays 3% compounded annually. If the woman deposits money with this firm instead of the one in part (a), how much will she have in her account at the end of 10 years? (c)...

You make deposits at the end of each month into an account earning interest at a...

You make deposits at the end of each month into an account earning interest at a rate of 6%/year compounded monthly. Your deposits will be $2000/month in the first year, $2200/month in the second year, $2420/month in the third year, $2662 in the fourth year, and so on. How much will be in your account at the end of 40 years? No Excel answers please.

Bob deposits $1,500 at the beginning of each quarter for sixteen years in a fund earning...

Bob deposits $1,500 at the beginning of each quarter for sixteen years in a fund earning a nominal rate of interest of 6% convertible monthly. The interest from this fund is paid out monthly and can only be reinvested at an effective annual rate of 5.2%. Find Bob’s yield rate for the twenty-year period.

George invested $1,250 at the end of every month into an investment fund that was earning...

George invested $1,250 at the end of every month into an investment fund that was earning interest at 4.25% compounded monthly. He stopped making regular deposits at the end of 9 years when the interest rate changed to 4.50% compounded quarterly. However, he let the money grow in this investment fund for the next 4 years. a. Calculate the accumulated balance in his investment fund at the end of 9 years b. Calculate the accumulated balance in his investment fund...

Raj deposits 50 into a fund at the end of each month for 5 years. The...

Raj deposits 50 into a fund at the end of each month for 5 years. The fund pays interest at an annual effective rate of i. The total amount of interest earned during the last month of year 5 is 13. Calculate the accumulated amount in Raj's account at the end of year 5 A) 3325 B) 3350 C) 3375 D) 3400 E) 3425

Subjects