Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lara is desired to accumulate a fund. She makes monthly equal payments for 50 times and the deposits earn interest at j4 = 12% but

Lara is desired to accumulate a fund. She makes monthly equal payments for 50 times and the deposits earn interest at j4 = 12% but the interest can only be reinvested to another account at j12 = 9%.

(a) If the balance of the first account right after the 30th deposit is $30000 dollars, what is the size of each deposit?

(b) Follow the previous question, if each deposit is made at the beginning of each month, how much money could Lara raise from this fund at the end of 50 months?

(c) If you are given that each payment is made at the end of each month, and right after that last deposit, the value for the second account (reinvestment account), is $4000, how much money could Lara raise from this fund right after she makes the last deposit?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions