You have $19,000 you want to invest for the next 28 years. You are offered an investment plan that will pay you 8 percent per year for the next 14 years and 12 percent per year for the last 14 years. a. How much will you have at the end of the 28 years?

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Brenna Holmes

19 June, 08:21

You have $19,000 you want to invest for the next 28 years. You are offered an investment plan that will pay you 8 percent per year for the next 14 years and 12 percent per year for the last 14 years. a. How much will you have at the end of the 28 years?

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Davenport · Answer 1

We will have $272,733 at the end of the 28 years.

Explanation:

Investment Amount = $19,000

Amount after first 14 years = $19,000 x (1 + 8%) ^14

Amount after first 14 years = $19,000 x (1 + 0.08) ^14

Amount after first 14 years = $19,000 x (1.08) ^14

Amount after first 14 years = $19,000 x 2.9372

Amount after first 14 years = $55,806.80

Amount after second 14 years = $55,806.80 x (1 + 12%) ^14

Amount after second 14 years = $55,806.80 x (1 + 0.12) ^14

Amount after second 14 years = $55,806.80 x (1.12) ^14

Amount after second 14 years = $55,806.80 x 4.8871

Amount after second 14 years = $272,733.41