Susan deposits $2000 into a bank account that pays interest at the following rates: • an effective rate of interest of 4% per annum for the first three months, • an effective rate of interest of 2.5% per annum for the following eight months, and • an effective rate of interest of 3% per annum thereafter. Calculate, correct to 2 decimal places, the accumulated value of Susan's deposit after exactly 6 months have elapsed. (a) (b) Calculate the least integer number of months she must leave that $2000 in the account for it to grow to at least $2200.
Susan deposits $2000 into a bank account that pays interest at the following rates: • an effective rate of interest of 4% per annum for the first three months, • an effective rate of interest of 2.5% per annum for the following eight months, and • an effective rate of interest of 3% per annum thereafter. Calculate, correct to 2 decimal places, the accumulated value of Susan's deposit after exactly 6 months have elapsed. (a) (b) Calculate the least integer number of months she must leave that $2000 in the account for it to grow to at least $2200.
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
Section: Chapter Questions
Problem 1PS
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Help me solve a and b, thank you
Transcribed Image Text:Susan deposits $2000 into a bank account that pays interest at the
following rates:
an effective rate of interest of 4% per annum for the first
three months,
an effective rate of interest of 2.5% per annum for the
following eight months, and
• an effective rate of interest of 3% per annum thereafter.
(a)
Calculate, correct to 2 decimal places, the accumulated value of
Susan's deposit after exactly 6 months have elapsed.
(b)
Calculate the least integer number of months she must leave that
$2000 in the account for it to grow to at least $2200.
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