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1000 is deposited in a fund A which earns an effective annual rate of 5%. At the end of each year, the interest earned plus an additional 50 are withdrawn and placed into a fund B which earns an effective annual rate of 9%. At the date when fund A is depleted, the accumulated value in fund B is used to buy a perpetuity which pays X every six months, the first payment issued 18 months after fund A is depleted. the effective annual rate of the perpetuity account is 7%. Find X.

1000 is deposited in a fund A which earns an effective annual rate of 5%. At the end of each year, the interest earned plus an additional 50 are withdrawn and placed into a fund B which earns an effective annual rate of 9%. At the date when fund A is depleted, the accumulated value in fund B is used to buy a perpetuity which pays X every six months, the first payment issued 18 months after fund A is depleted. the effective annual rate of the perpetuity account is 7%. Find X.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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1000 is deposited in a fund A which earns an effective annual rate of 5%. At the end of each year, the interest earned plus an additional 50 are withdrawn and placed into a fund B which earns an effective annual rate of 9%. At the date when fund A is depleted, the accumulated value in fund B is used to buy a perpetuity which pays X every six months, the first payment issued 18 months after fund A is depleted. the effective annual rate of the perpetuity account is 7%. Find X.
Transcribed Image Text:1000 is deposited in a fund A which earns an effective annual rate of 5%. At the end of each year, the interest earned plus an additional 50 are withdrawn and placed into a fund B which earns an effective annual rate of 9%. At the date when fund A is depleted, the accumulated value in fund B is used to buy a perpetuity which pays X every six months, the first payment issued 18 months after fund A is depleted. the effective annual rate of the perpetuity account is 7%. Find X.
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