FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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6) $25,000 is deposited at t= 0 into an account earning 4% effective annual interest. At
the end of each year, the interest earned in that year plus an additional $500 is withdrawn
from this account and put into another account earning 2% effective annual interest. Find the
accumulated value in the second account after 50 years (when the first account is completely
depleted.)
Also, fill in the following table (or, redraw the table on your solution sheet being handed
in and fill it in).
Year
Amount in
1st account
Amount deposited
into 2nd account
0
2
3
...
B
49
50
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Transcribed Image Text:6) $25,000 is deposited at t= 0 into an account earning 4% effective annual interest. At the end of each year, the interest earned in that year plus an additional $500 is withdrawn from this account and put into another account earning 2% effective annual interest. Find the accumulated value in the second account after 50 years (when the first account is completely depleted.) Also, fill in the following table (or, redraw the table on your solution sheet being handed in and fill it in). Year Amount in 1st account Amount deposited into 2nd account 0 2 3 ... B 49 50
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