anonymous
  • anonymous
sarah deposited $2000 in an investment fund that earned 12.6% per year compounded anually. after 5 years the funds were invested in a second investment fund that earned 15.8% per year compunded semi anually. if the second fund continues earning at the same rate how much will sarahs fund be worth after an additional 5 years?
Mathematics
chestercat
  • chestercat
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Mertsj
  • Mertsj
\[A=P(1+\frac{r}{n})^{nt}\]
Mertsj
  • Mertsj
\[A=2000(1+\frac{.126}{1})^{5}=3620.11\]
Mertsj
  • Mertsj
That's the first 5 years. Now we will invest that for the next 10 years:

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Mertsj
  • Mertsj
\[A=3620.11(1+\frac{.158}{2})^{2(5)}=7743.48\]
Mertsj
  • Mertsj
That's for the next 5 years, not 10. 10 years total.

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