Score:0 of 1 pt 18 of 24(1complete) Hw Score: e25%, 15 of 24 pts Bus Econ 5.2.51

Question

Score:0 of 1 pt 18 of 24(1complete) Hw Score: e25%, 15 of 24 pts Bus Econ 5.2.51 sartig at age 5 awoman puts $1800 at the erd of each qarter r toaresm outst2oonhesarme m when she maches age 60 sheanunt and plamenamt ti damn ht taocou that pays 7% nterest onoorded quart ny halfnd at he ond of each mont, How much isinheomrt whenshore-ches age es? e the wen sg% oompounded montiy From ten on the Al age 65 she has (Simplifly your answer. Type an integer or a decimal Round intermediate stops to the nearest cent. Rlound the fnal anewer to the nearest doler d)

Explanation / Answer

The initial fund at 7% will accumulate to a value at age 60 equal to ...

Value at 60 = 1800[ (1+0.07/4)^(4*10) - 1] / (0.07/4) = 103,021.44

Now accumulate this value for 5 more years using 9% ...

103,021.44(1+ 0.09/12)^(12*5) = 161,298.71

Next, accumulate the $200/mo payments ...

200[ (1+0.09/12)^(12*5) - 1] / (0.09/12) = 15,084.83

Finally, add the two values ...

161,298.71 + 15,084.83 = 176,383.54

So, she will have $176,383.54 in her account at 65.

Hope that helps

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