Payments of 1000 are invested at the end of each year for 5 years. The payments earn interest at an annual effective rate of 10%. The interest can be reinvested at an annual effective rate of 6% in the first 4 years and at an annual effective rate of k thereafter. The amount in the fund at the end of 5 years is 6000. Calculate k.

Payments of 1000 are invested at the end of each year for 5 years. The payments earn interest at an annual effective rate of 10%. The interest can be reinvested at an annual effective rate of 6% in the first 4 years and at an annual effective rate of k thereafter. The amount in the fund at the end of 5 years is 6000. Calculate k.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 7P

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