Posted by **Ajay** on Tuesday, June 26, 2012 at 7:17am.

Kate is thinking about investing $60 000 for 4 years. She deposits her money into an account which earns interest paid semiannually at a rate of 7% p.a. After 2½ years, the interest rate drops to 5.6% p.a. and stays constant for the remainder of the investment period.

Use Excel or another suitable method to solve the problems below.

(a) How much interest was accrued in the second year of the investment?

(b) What will be the balance of Kate’s account at the end of the fourth year?

- Maths Investments -
**Reiny**, Tuesday, June 26, 2012 at 8:13am
amount after the first 2½ years

= 60000(1.035)^7

= 76336.756

I will assume that the rate for the remaining 1½ of 5.6% is also compounded semiannually

amount at end of 4 years

= 76336.756(1.028)^3

= 82930.26

- correction - Maths Investments -
**Reiny**, Tuesday, June 26, 2012 at 9:13am
Don't know how I got 7 as the exponent in the first part

of course it should have been 5 ( for 5 half years in 2 1/2 years)

Please make the necessary corrections.

- Maths Investments -
**Juan**, Saturday, November 10, 2012 at 3:06pm
A woman has a total of $9,000 to invest. She invests part of the money in an account that pays 8% per year and the rest in an account that pays 11% per year. If the interest earned in the first year is $840, how much did she invest in each account?

## Answer This Question

## Related Questions

- Maths (Investments) - Kate is thinking about investing $60 000 for 4 years. She ...
- Maths B - Kate is thinking about investing $45000 for 5 years. She deposits her ...
- math - Investor A deposits 1,000 into an account that earns an interest rate of ...
- Calc - A person deposits money into a retirement account, which pays 7% interest...
- Math - (a) Themba wants to deposit a sum of money into a savings account so that...
- Algebra - A company invests $15,000.00 in an account that compounds interest ...
- Math - A company invests $15,000.00 in an account that compounds interest ...
- Algebra Question~! - A company invests $15,000.00 in an account that compounds ...
- Math - Please check my work, thank you If $7,800 is deposited into an account ...
- Algebra B - I can't figure this out, please help... A company invests $15,000.00...

More Related Questions