Payments of 1000 are invested at the end of each year for 5 years. The payments earn interest at an annual effective rate of 10%. The interest can be reinvested at an annual effective rate of 6% in the first 4 years and at an annual effective rate of k thereafter. The amount in the fund at the end of 5 years is 6000. Calculate k.

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
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i got stuck on answering this question on the part of the equation that is supposed to calculate for the value of the investment with the annual effective rate of k

Payments of 1000 are invested at the end of each year for 5 years. The payments earn interest at an
annual effective rate of 10%. The interest can be reinvested at an annual effective rate of 6% in the first
4 years and at an annual effective rate of k thereafter. The amount in the fund at the end of 5 years is
6000. Calculate k.
Transcribed Image Text:Payments of 1000 are invested at the end of each year for 5 years. The payments earn interest at an annual effective rate of 10%. The interest can be reinvested at an annual effective rate of 6% in the first 4 years and at an annual effective rate of k thereafter. The amount in the fund at the end of 5 years is 6000. Calculate k.
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