1000 is deposited in a fund A which earns an effective annual rate of 5%. At the end of each year, the interest earned plus an additional 50 are withdrawn and placed into a fund B which earns an effective annual rate of 9%. At the date when fund A is depleted, the accumulated value in fund B is used to buy a perpetuity which pays X every six months, the first payment issued 18 months after fund A is depleted. the effective annual rate of the perpetuity account is 7%. Find X.

1000 is deposited in a fund A which earns an effective annual rate of 5%. At the end of each year, the interest earned plus an additional 50 are withdrawn and placed into a fund B which earns an effective annual rate of 9%. At the date when fund A is depleted, the accumulated value in fund B is used to buy a perpetuity which pays X every six months, the first payment issued 18 months after fund A is depleted. the effective annual rate of the perpetuity account is 7%. Find X.

College Algebra

7th Edition

ISBN:9781305115545

Author:James Stewart, Lothar Redlin, Saleem Watson

Publisher:James Stewart, Lothar Redlin, Saleem Watson

Chapter8: Sequences And Series

Section8.4: Mathematics Of Finance

Problem 1E: An annuity is a sum of money that is paid in regular equal payments. The __________ of an annuity is...

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