9. The Twin Problem: a) Twin # 1 (at age 23) invests $2000 at the end of each 6 months for 10 years only, till he reaches age 33, in an annuity account that earns 8%, compounded semiannually. He stops paying anything into the account at age 33, but keeps the balance in the account till he reaches age 65. How much does he have in his account at age 65? 9a). b) Twin # 2 waits until he turns age 40 before beginning investing. For the next 25 years, he invests in an annuity at the end of every 6 months, that earns 8%, compounded semiannually. How much must Twin # 2 pay each period (every 6 months) in order for him to have as much as Twin # 1 when they both reach age 65? 9b) R =
9. The Twin Problem: a) Twin # 1 (at age 23) invests $2000 at the end of each 6 months for 10 years only, till he reaches age 33, in an annuity account that earns 8%, compounded semiannually. He stops paying anything into the account at age 33, but keeps the balance in the account till he reaches age 65. How much does he have in his account at age 65? 9a). b) Twin # 2 waits until he turns age 40 before beginning investing. For the next 25 years, he invests in an annuity at the end of every 6 months, that earns 8%, compounded semiannually. How much must Twin # 2 pay each period (every 6 months) in order for him to have as much as Twin # 1 when they both reach age 65? 9b) R =
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 6E
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Transcribed Image Text:9. The Twin Problem:
a) Twin # 1 (at age 23) invests $2000 at the end of each 6 months for 10 years
only, till he reaches age 33, in an annuity account that earns 8%,
compounded semiannually. He stops paying anything into the account at
age 33, but keeps the balance in the account till he reaches age 65.
How much does he have in his account at age 65?
9a)
b) Twin # 2 waits until he turns age 40 before beginning investing. For the next
25 years, he invests in an annuity at the end of every 6 months, that earns
8%, compounded semiannually. How much must Twin # 2 pay each period
(every 6 months) in order for him to have as much as Twin #1 when they
both reach age 65?
9b) R =
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