document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1083495>Question 1083495</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Jimmy invest Rm 15,000 in an account for six years. The investment account pays 8%\r<BR>\n" );
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document.write( "compounded semi-annually for the first two years and 9% compounded monthly for the\r<BR>\n" );
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document.write( "rest of the period.\r<BR>\n" );
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document.write( "a. What is the maturity value of this investment?\r<BR>\n" );
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document.write( "b. Find the interest earned from this investment.\r<BR>\n" );
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document.write( "2. Given two interest rate (a) 4.8% compounded monthly and (b) 5% compounded every\r<BR>\n" );
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document.write( "three months, which of the two interest rates provides a better return? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #697494 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=697494\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> P=Po(1+(r/t))^nt<BR>\n" );
document.write( "15000(1+.08/2)^4, divide the interest rate by 2 for the compounding, and multiply the number of compoundings by 2 because semiannual.<BR>\n" );
document.write( "=$17547.88<BR>\n" );
document.write( "Now use that for 9% compounded monthly<BR>\n" );
document.write( "P=17547.88(1+(.09/12))^48, the 48 being 12 monthly compoundings for 4 years: $25,228.13, rounding at the end.  MATURITY VALUE<BR>\n" );
document.write( "The interest earned:<BR>\n" );
document.write( "first two years: $2547.88<BR>\n" );
document.write( "Total: $10,228.13-$2547.88 earned in two years=<BR>\n" );
document.write( "7680.25 earned in last four years<BR>\n" );
document.write( "TOTAL INTEREST IS $10228.13<BR>\n" );
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document.write( "Do it for one year<BR>\n" );
document.write( "(1+(.048/12))^12=1.04907<BR>\n" );
document.write( "(1+.05/4)^4=1.05094<BR>\n" );
document.write( "The second one, at 5% every 3 months. </SPAN>\n" );
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