Here are two ways of investing $50,000 for 20 years. Lump-Sum Deposit Rate Time $50,000 5% compounded annually 20 years Periodic Deposit Rate Time $2500 at the end of each year 5% compounded annually 20 years Use this information and the formulas A=P(1+r)t and A=P(1+r)t−1r to complete parts a. and b. below. Question content area bottom Part 1 a. After 20 years, how much more will you have from the lump-sum investment than from the annuity? You will have approximately $enter your response here more from the lump-sum investment than from the annuity. (Round to the nearest dollar as needed.)
Here are two ways of investing $50,000 for 20 years. Lump-Sum Deposit Rate Time $50,000 5% compounded annually 20 years Periodic Deposit Rate Time $2500 at the end of each year 5% compounded annually 20 years Use this information and the formulas A=P(1+r)t and A=P(1+r)t−1r to complete parts a. and b. below. Question content area bottom Part 1 a. After 20 years, how much more will you have from the lump-sum investment than from the annuity? You will have approximately $enter your response here more from the lump-sum investment than from the annuity. (Round to the nearest dollar as needed.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Here are two ways of investing
$50,000
for
20
years.|
Lump-Sum Deposit
|
Rate
|
Time
|
|---|---|---|
|
$50,000
|
5%
compounded annually |
20
years |
|
Periodic Deposit
|
Rate
|
Time
|
|---|---|---|
|
$2500
at the end of each year
|
5%
compounded annually |
20
years |
Use this information and the formulas
A=P(1+r)t
and
A=P(1+r)t−1r
to complete parts a. and b. below.Question content area bottom
Part 1
|
a.
|
After
20
years, how much more will you have from the lump-sum investment than from the annuity?You will have approximately
$enter your response here
more from the lump-sum investment than from the annuity.(Round to the nearest dollar as needed.)
|
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