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A IS sted at an annual interest rate of 2.5%. At the end of 20 years, the total in the two funds is P 10,00 end of 31 years, the amount in Fund A is twice the amount in Fund B. Calculate the to two funds at the end of 10 years. Hint: Let A₁ = P₁(1.03)' and B = P(1.025)' be the AV's of Funds A and B at time t resp

A IS sted at an annual interest rate of 2.5%. At the end of 20 years, the total in the two funds is P 10,00 end of 31 years, the amount in Fund A is twice the amount in Fund B. Calculate the to two funds at the end of 10 years. Hint: Let A₁ = P₁(1.03)' and B = P(1.025)' be the AV's of Funds A and B at time t resp

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter2: Descriptive Statistics
Section: Chapter Questions
Problem 17P: Suppose that you initially invested 10,000 in the Stivers mutual fund and 5,000 in the Trippi mutual...
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(1) (D) Fund A is invested at an effective annual interest rate of 3%. Fund B is invested at an effective annual interest rate of 2.5%. At the end of 20 years, the total in the two funds is P 10,000. At the end of 31 years, the amount in Fund A is twice the amount in Fund B. Calculate the total in the two funds at the end of 10 years. Hint: Let A₁ = P₁(1.03)' and B, = P(1.025)' be the AV's of Funds A and B at time t respectively. Then use the equations, A20 + B20 = P10,000 and A31 = 2B31 to determine the values of PA and PB.
Transcribed Image Text:(1) (D) Fund A is invested at an effective annual interest rate of 3%. Fund B is invested at an effective annual interest rate of 2.5%. At the end of 20 years, the total in the two funds is P 10,000. At the end of 31 years, the amount in Fund A is twice the amount in Fund B. Calculate the total in the two funds at the end of 10 years. Hint: Let A₁ = P₁(1.03)' and B, = P(1.025)' be the AV's of Funds A and B at time t respectively. Then use the equations, A20 + B20 = P10,000 and A31 = 2B31 to determine the values of PA and PB.
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