Two years ago my daughter was born. On the day she was born I put $4000 into an account for her. The account earned i% annually (you'll need to find out what that interest rate is). That interest rate on the account will be fixed until she turns 9, at which point I will transfer whatever is in that account into a new one which is expected to earn 6% per year, and then I'll leave that money in that account until her 16th birthday. I plan to take her to Italy to visit her Nona when she turns 12. I expect that trip to cost $6000 and I intend to withdraw that amount from the account. On her 16th birthday her account has a positive balance of $622. Find the interest rate of her initial account
Two years ago my daughter was born. On the day she was born I put $4000 into an account for her. The account earned i% annually (you'll need to find out what that interest rate is). That interest rate on the account will be fixed until she turns 9, at which point I will transfer whatever is in that account into a new one which is expected to earn 6% per year, and then I'll leave that money in that account until her 16th birthday. I plan to take her to Italy to visit her Nona when she turns 12. I expect that trip to cost $6000 and I intend to withdraw that amount from the account. On her 16th birthday her account has a positive balance of $622. Find the interest rate of her initial account
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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Two years ago my daughter was born. On the day she was born I put $4000 into an account for her. The account earned i% annually (you'll need to find out what that interest rate is). That interest rate on the account will be fixed until she turns 9, at which point I will transfer whatever is in that account into a new one which is expected to earn 6% per year, and then I'll leave that money in that account until her 16th birthday. I plan to take her to Italy to visit her Nona when she turns 12. I expect that trip to cost $6000 and I intend to withdraw that amount from the account. On her 16th birthday her account has a positive balance of $622. Find the interest rate of her initial account
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