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Problem #1: $10,000 is used to purchase an appropriate size annuity that has level annual payments for 14 years. The price of the annuity is
Problem #1: $10,000 is used to purchase an appropriate size annuity that has level annual payments for 14 years. The price of the annuity is based on an effective annual rate of 9%. As each payment is received, it is put into a fund that earns an effective annual rate of 5.6%. (a) Determine the accumulated value of the investment at the end of 14 years. (b) If the $10,000 were put into a fund that was to produce the same final value after 14 years, what annual effective rate would that fund have to offer? Problem #1(a): Answer correct to 2 decimals. Problem #1(b): Answer as a percentage, correct to 2 decimals. (Do not include the % sign in your answer.) Just Save Submit Problem #1 for Grading Problem #1 Attempt #1 Your Answer: 1(a) 1(b) Your Mark: 1(a) 1(b) Attempt #2 1(a) 1(b) 1(a) 1(b) Attempt #3 1(a) 1(b) 1(a) 1(b) Attempt #4 1(a) 1(b) Attempt 35 1(a) 1(b) 1(a) 1(b) 1(a) 1(b)
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