An investor saves £30 at the beginning of eachmonth for 10 years and then this payment is increased to £50 at the beginning of each month for a further 10 years. The interest rate remains at a constant 2.4% per annum calculated monthly for the first five years and then drops to 1.8% per annum for the rest of the period also calculated monthly. (a)Calculate the accumulated value after 20 years. (b)Calculate the constant amount that would have to be saved monthly to give the same accumulated value (c)Consider the initial case. At the beginning of the 12th and 15th years, £300 both times is withdrawnfrom the account. Calculate the accumulated value after 20 years in this case. (d)In the initial case,which of the withdrawals in (c) does most damage to the accumulated value of the account? Why?
A question from Application of Mathematics in Finance and Investment( I requires help using financial terms and equations please):
An investor saves £30 at the beginning of eachmonth for 10 years and then this payment is increased to £50 at the beginning of each month for a further 10 years. The interest rate remains at a constant 2.4% per annum calculated monthly for the first five years and then drops to 1.8% per annum for the rest of the period also calculated monthly.
(a)Calculate the accumulated value after 20 years.
(b)Calculate the constant amount that would have to be saved monthly to give the same accumulated value
(c)Consider the initial case. At the beginning of the 12th and 15th years, £300 both times is withdrawnfrom the account. Calculate the accumulated value after 20 years in this case.
(d)In the initial case,which of the withdrawals in (c) does most damage to the accumulated value of the account? Why?
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