Question

:30 Question 12 of 13 Sophie's investment manager offers her an interest rate of 8.0% compounded monthly on her investments. If the manager changes his mind and offers her a rate of 8.0% compounded annually how much more would she have to deposit at the end of each year in order to accumulate $421,000 in 25 years? Round to the nearest cent

Answer 1

then codculating en each urdeally use CE Rother payment indivu and then odding them all up, we can following formula for future value of an ordinary annuity given os fv CX (st Ordinary Annuity ca Cash flow fer period interest sete number of payments when faymente core comfounded monthly, 8% = 8% compounded 421000 = с (1 + .0067) monthy time period My 300 28 years 0067 12x25 = 300 300 424 000 ar S (1.0067) o 0067 421000 GX gs 7.23 421000 SC, 957.23 P. 439-818 12 G= $439. 81 per month. Payment mode in year P,= $5277.72 when payments care compounded annually, (1+. 08)-1 82=8% compounded 421000 ennully time period n=rsyss 08 ☺ 44000 = ( ( (1.068)

421000 6.84-1 با . 08 421000 (3 ( 73-11) 424000 73.0 G = $5758.45 year $5758.45 So excess payment payment which is to be mode AP= P₂ - Pih AP - $ 5758.45 – $5277.72 payment mode fer DP= $ 480-73 do exers payment of 480.73 hos to be deposit at the end end of each year.