4. Richard makes payments of $400 into a savings account each month. The account gains interest at a rate of 4.2% compounded monthly. 20 years later, he takes his money out of this account and places it in an account that gains continuously compounded interest at a rate of 4.0%. At this point, he is no longer making additional payments. (a) How much money is in his account at the end of the first 20 year period? (b) How much money is in his account 15 years after moving his money to the second account? (c) Use Desmos to draw a graph showing how his money growth over the full 35 year period.

4. Richard makes payments of $400 into a savings account each month. The account gains interest at a rate of 4.2% compounded monthly. 20 years later, he takes his money out of this account and places it in an account that gains continuously compounded interest at a rate of 4.0%. At this point, he is no longer making additional payments. (a) How much money is in his account at the end of the first 20 year period? (b) How much money is in his account 15 years after moving his money to the second account? (c) Use Desmos to draw a graph showing how his money growth over the full 35 year period.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 24P

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