Question
1.. You invest $2,000 in a certificate of deposit that matures after eight years and pays 6 percent interest, which is compounded annually until the
1.. You invest $2,000 in a certificate of deposit that matures after eight years and pays 6 percent interest, which is compounded annually until the certificate matures. Use Appendix A to answer the questions. Round your answers to the nearest dollar.
How much interest will you earn if the interest is left to accumulate? $
How much interest will you earn if the interest is withdrawn each year? $
2. A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar. $
At retirement how much can she withdraw each year for 20 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar. $
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