When you were born

your parents set up a bank account in your name with an initial

investment of $5,000. You are turning 21 in a few days and will access to all your funds. The

account was earning 7.3% per year for the first 7 years, but then the rates went down to 5.5%

per

year for 6 years. The economy then did well and your account earned 8.2% per year for 3

years in a row. Unfortunately, the next 2 years you earned only 4.6%. Finally as the economy

recovered, your return jumped to 7.6% for the last 3 years. Assume interest

is compounding

annually.

a)

How much money is your account now (end of year 21)?

b)

What would be the balance now if your parents had made another deposit into your

account of $1,200 at the end of year 7