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5.3 cont.)
Ex.1I
Suppose you invest $1000 at the end of each year for 5
years in an account that pays 10% interest compounded
annuafly. What is the value after 5 years?
5.3 cont.)
I Ex. 2
Twins Story
Twin 1: At the end of college, she invests $2000 at the end
of each year for 8 years in an account that earns 10%
compounded annually. After 8 years, she contributes
nothing, but it continues to earn 10% for 36 years. How
much did she invest? How much does she have in the
account?
Twin 2: At the end of college, he invests nothing for 8 years.
Then he puts $2000 into an account at the end of each year
for 36 years, earning 10% interest compounded annually.
How much did he invest? How much does he have in the
account?
5.3 cont.)
IEx.3
How much should be invested at the end of each quarter in
an account with 12% interest compounded quarterly to pay
off a $30,000 debt in 6 years?
Ex. 4
If you deposit $100 at the begirrnirg of each month for 8
years into an account that pays 8% interest compounded
monthly. What is the future value of the account?