Hómework: Chapter 4.5 Save Score: 0 of 5 pts 101 5 (2 complete) Hw score: 40%, 1

Question

Hómework: Chapter 4.5 Save Score: 0 of 5 pts 101 5 (2 complete) Hw score: 40%, 10 of 25 pts Problem 4-94 (algorithmic) Question Help An nivdual makes six an al deposits of $1 8 0 in a sav ngs account that pays interest at a rate of 3% per year Two years after making the last deposit he interest st rate changes to 6% per ye: Click the icon to ve The amount withdrawn is ive years after the last deposit, the accumulated money is withdrawn from the account how much is withdrawn? 3% per year 6% per year terest and annuity table for discrete compounding when , Click the icon to view the interest and annuity table for discrete compounding when (Round to the nearest dollar )

Explanation / Answer

For first 8 years, interest rate is 3% and for next 3 years is 6%

A withdrawl of $14711.67 can be made at the end of 11 years

n Deposit Money @ end of 8 years (i=3%) 11 year (i=6%) 1 1800 2213.77 2636.64 2 1800 2149.29 2559.84 3 1800 2086.69 2485.29 4 1800 2025.92 2412.90 5 1800 1966.91 2342.62 6 1800 1909.62 2274.39 Sum 14711.67 Total = P x (1+ 0.01i)n

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