Lucky Lindy has just won $20,000 and wants to invest it for 12 years. There are three plans available to her. a) A savings account that pays 3¾% per year, compounded daily. b) A money market certificate that pays 6¾% per year, compounded semiannually. c) An investment account that based on past experience is likely to pay 8½% per year. If Lindy does not withdraw the interest, how much will be in each of the three investment plans at the end of 12 years?
Lucky Lindy has just won $20,000 and wants to invest it for 12 years. There are three plans available to her. a) A savings account that pays 3¾% per year, compounded daily. b) A money market certificate that pays 6¾% per year, compounded semiannually. c) An investment account that based on past experience is likely to pay 8½% per year. If Lindy does not withdraw the interest, how much will be in each of the three investment plans at the end of 12 years?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 24P
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Transcribed Image Text:Lucky Lindy has just won $20,000 and wants to invest it for 12 years. There are three plans
available to her.
a) A savings account that pays 3%% per year, compounded daily.
b) A money market certificate that pays 6¾% per year, compounded semiannually.
c) An investment account that based on past experience is likely to pay 8½% per year.
If Lindy does not withdraw the interest, how much will be in each of the three investment plans at
the end of 12 years?
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