4) $20,000 is deposited into an account earning 4% effective annual interest. At the end of each year, the interest earned in that year plus an additional $500 is withdrawn from this account and put into another account earning 3% effective annual interest. Find the accumulated value in the second account after 40 years (when the first account is completely depleted.) in). Also, fill in the following table (or, redraw the table on your solution sheet being handed in and fill it Year Amount in 0 1 2 3 39 40 1st account Amount deposited into 2nd account

4) $20,000 is deposited into an account earning 4% effective annual interest. At the end of each year, the interest earned in that year plus an additional $500 is withdrawn from this account and put into another account earning 3% effective annual interest. Find the accumulated value in the second account after 40 years (when the first account is completely depleted.) in). Also, fill in the following table (or, redraw the table on your solution sheet being handed in and fill it Year Amount in 0 1 2 3 39 40 1st account Amount deposited into 2nd account

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 8P

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