Question 1087486: Please help.
Michael wins $600,000 (after taxes) in the lottery and decides to invest half of it in a 5 year CD that pays 4.95% interest compound monthly. He invests the other half in a money market fund that retirement account that averages 7.3% interest compounded annually over the 5 year period. How much money will he have altogether in the two accounts at the end of the 5 year period? show all work
Found 2 solutions by Boreal, rfer:
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! The two equations are
$300000(1+(0.0495/12)^60, dividing the interest by 12 and having 60 compoundings.
$300000(1+0.073)^5
They are equal to $384,050.25 and $426697.27
That sum is $810,747.52.
On the calculator, start with the 1 + per cent interest. Raise that to the appropriate power without rounding, then multiply by $300,000, rounding only at the end.
Answer by rfer(16322)  (Show Source):
You can put this solution on YOUR website! A)
FV=300000(1+0.045/12)^(12*5)
FV=300000(1.004125)^60
FV=300000(1.28)
FV=384,050.00
B)
FV=300000(1.073)^5
FV=300000(1.4223)
FV=426,697.00
C)
384050+426697=810,747.00
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