Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dewey deposits 1000 into an account paying 6% annual simple interest. The interest is paid at the end of each year. When the interest is

image text in transcribed

Dewey deposits 1000 into an account paying 6% annual simple interest. The interest is paid at the end of each year. When the interest is paid, Dewey moves the accrued interest into another account. This second account earns an annual effective rate of i, payable as an annual dividend at the end of each year. Upon receipt, Dewey deposits each of these dividends into a third account. The third account pays an annual effective rate of 4%. The interest payments made into this account are left in the account to continue growing. After 10 years, the sum of the balances in Dewey's three accounts is 1762.50. Find i. Dewey deposits 1000 into an account paying 6% annual simple interest. The interest is paid at the end of each year. When the interest is paid, Dewey moves the accrued interest into another account. This second account earns an annual effective rate of i, payable as an annual dividend at the end of each year. Upon receipt, Dewey deposits each of these dividends into a third account. The third account pays an annual effective rate of 4%. The interest payments made into this account are left in the account to continue growing. After 10 years, the sum of the balances in Dewey's three accounts is 1762.50. Find

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Trading And Investing

Authors: John Teall

3rd Edition

0323909558, 978-0323909556

More Books

Students also viewed these Finance questions