Revision as of 00:02, 22 November 2023 by Admin (Created page with "Michael deposits $20,000 into his bank account. For the first 4 years the bank credits an interest of i convertible quarterly and 3i convertible monthly after that. If he has $80,000 in his account after 14 years, how much does he have after 3 years? <ul class="mw-excansopts"><li>$26,918.25</li><li>$22,084.93</li><li>$22,873.49</li><li>$22,604.63</li><li>$22,603.53</li></ul> {{cite web |url=https://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1008&context=...")
ABy Admin
Nov 22'23
Exercise
Michael deposits $20,000 into his bank account. For the first 4 years the bank credits an interest of i convertible quarterly and 3i convertible monthly after that.
If he has $80,000 in his account after 14 years, how much does he have after 3 years?
- $26,918.25
- $22,084.93
- $22,873.49
- $22,604.63
- $22,603.53
Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.
ABy Admin
Nov 22'23
Solution: E
Deposit: 20,000
i for 4 years quarterly
3i after the 4 years monthly
80,000 after 14 years
First find i:
80,000 = 20,000(1 + i/4)16(1 + 3i/12)108 4 = (1 + i/4)136 i = .045
After 3 years:
20,000(1 + i/4)12 = $22,603.53
Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.