A. Twin #1 (at age 23) invests $2000 at the end of each 6 months for 10 years only, till he reaches age 33, in an annuity account that earns 8%, compounded semiannually. He stops paying anything into the account at age 33, but keeps the balance in the account till he reaches age 65. How much does he have in his account at age 65? B. Twin #2 waits until he turns age 40 before beggining investing. For the next 25 years, he invests in an annuity at the end of every 6 months, that earns 8%, compounded semiannually. How much must twin #2 pay each period (every 6 months) in order for him to have as much as twin #1 when they both reach age 65?
A. Twin #1 (at age 23) invests $2000 at the end of each 6 months for 10 years only, till he reaches age 33, in an annuity account that earns 8%, compounded semiannually. He stops paying anything into the account at age 33, but keeps the balance in the account till he reaches age 65. How much does he have in his account at age 65? B. Twin #2 waits until he turns age 40 before beggining investing. For the next 25 years, he invests in an annuity at the end of every 6 months, that earns 8%, compounded semiannually. How much must twin #2 pay each period (every 6 months) in order for him to have as much as twin #1 when they both reach age 65?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A. Twin #1 (at age 23) invests $2000 at the end of each 6 months for 10 years only, till he reaches age 33, in an
How much does he have in his account at age 65?
B. Twin #2 waits until he turns age 40 before beggining investing. For the next 25 years, he invests in an annuity at the end of every 6 months, that earns 8%, compounded semiannually. How much must twin #2 pay each period (every 6 months) in order for him to have as much as twin #1 when they both reach age 65?
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