1) You make a $75,000 investment in the following way: You purchase an annuity immediate with 30 level annual payments at an effective annual interest rate of 3%. The payments received are immediately deposited in a fund earning an effective annual interest rate of 5%. Find the accumulated value after the 30 years and find the equivalent effective annual interest rate for this investment over the 30 years.
1) You make a $75,000 investment in the following way: You purchase an annuity immediate with 30 level annual payments at an effective annual interest rate of 3%. The payments received are immediately deposited in a fund earning an effective annual interest rate of 5%. Find the accumulated value after the 30 years and find the equivalent effective annual interest rate for this investment over the 30 years.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 29P
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![1) You make a $75,000 investment in the following way: You purchase an annuity immediate with 30
level annual payments at an effective annual interest rate of 3%. The payments received are immediately
deposited in a fund earning an effective annual interest rate of 5%. Find the accumulated value after the
30 years and find the equivalent effective annual interest rate for this investment over the 30 years.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4bf210e6-f62f-4865-a891-e162b5418613%2F189dc8cc-39af-4e26-9d8e-f58b2104beea%2Ftpdelpj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1) You make a $75,000 investment in the following way: You purchase an annuity immediate with 30
level annual payments at an effective annual interest rate of 3%. The payments received are immediately
deposited in a fund earning an effective annual interest rate of 5%. Find the accumulated value after the
30 years and find the equivalent effective annual interest rate for this investment over the 30 years.
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