Belle invests RM7000 in a savings account at 3.2% rate of interest, compounded annually. No further deposits or withdrawals have been made. (a) What is the total amount in her account at the end of sixth year? How much interest earned by her during those period? If Belle's cousin, Jesse decided to invest the same amount (b) at a different bank at 2.9% compounded monthly, how many complete years will it take for Jesse's account to grow to double the amount? (c) If Belle would like her account to double within the same period as Jesse's account as found in part (b), what is the interest rate she should consider if the interest is to be compounded annually?
Belle invests RM7000 in a savings account at 3.2% rate of interest, compounded annually. No further deposits or withdrawals have been made. (a) What is the total amount in her account at the end of sixth year? How much interest earned by her during those period? If Belle's cousin, Jesse decided to invest the same amount (b) at a different bank at 2.9% compounded monthly, how many complete years will it take for Jesse's account to grow to double the amount? (c) If Belle would like her account to double within the same period as Jesse's account as found in part (b), what is the interest rate she should consider if the interest is to be compounded annually?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 2STP
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Answer question 4
Transcribed Image Text:Belle invests RM7000 in a savings account at 3.2% rate of
interest, compounded annually. No further deposits or
withdrawals have been made.
4.
(a) What is the total amount in her account at the end of sixth
year? How much interest earned by her during those period?
If Belle's cousin, Jesse decided to invest the same amount
(b)
at a different bank at 2.9% compounded monthly, how
many complete years will it take for Jesse's account to grow
to double the amount?
If Belle would like her account to double within the same
(c)
period as Jesse's account as found in part (b), what is the
interest rate she should consider if the interest is to be
compounded annually?
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