A mother earned $18750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a newhome. The balance will be used for her son's future education. She invests a portion of the money in a bank certificate ofdeposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned afterone year is $900.00, how much money was invested at each rate?How much money was invested in the CD account?(Round to the nearest cent.)GILB

The interest earned from all the categories of investment that a single investor has made is known…

Answered: A mother earned $18750.00 from…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 69P

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On the day his son was born, a father deposited to a trust company a sufficient amount of money so that his son could receive money in the future. There was a provision that the son can withdraw an amount of P10,000 each year for 3 years starting on his 18th birthday and P15,000 eight months after the last withdrawal. The interest rate is 5% compounded monthly. 1. What is the effective interest rate? 2. How much did the father deposit? 3. How much money can he receive on his 18th birthday, if he decided to withdraw all the money at once?

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