Question
Suppose someone wants to accumulate $110,000 for retirement in 30 years. The person has two choices. Plan A is a single deposit into an account
Suppose someone wants to accumulate $110,000 for retirement in 30 years. The person has two choices. Plan A is a single deposit into an account with annual compounding and an APR of 8%. Plan B is a single deposit into an account with continuous compounding and an APR of . How much does the person need to deposit in each account to reach the goal?
Use the formula for continuous compounding to compute the balance in the account after 1, 5, and 20 yearsAlso find the APY for the account. A $2000 deposit in an account with an APR 8\%
Use the formula for continuous compounding to compute the balance in the account after and years. Also, find the APY for the account A $19,000 deposit in an account with an APR of 3.75%.
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Cornerstones of Financial and Managerial Accounting
Authors: Rich Jones, Mowen, Hansen, Heitger
1st Edition
9780538751292, 324787359, 538751290, 978-0324787351
