Question

Functions 1. You are presented with two investment strategies for the next ten years. In strategy A, you deposit $300 into an account at the end of each month for the next four years, then allow the account to accumu- late interest for the remaining six years. In strategy B, you do nothing for five years and then deposit $300 at the start of each month for the remaining five years. In both cases, interest is paid at the rate of 2.5% per annum compounded monthly. Find the future values Af and Bj for each strategy, showing your steps, and hence identify which will result in the larger account balance Important Note: Do not round off intermediate values in your cal culations, this can result in an error in your final answer and it will not be accepted as correct by the computer marking. You only ever want to round off the final answer 2. You are due to graduate in three year's time but you've just found out that you wil have to pay a $1000 library fine on your graduation day. To pay this off, you deposit a fixed amount into an account at the end of each month, with interest paid at the rate of 3% per annum compounded monthly. How much do you save by using this strategy compared to paying the entire debt off at once? Show your steps. (Hint: Find the regular payment and how many of these you will make. Round the regular payment to two decimal places.)

Answer 1

in re 41 十2. 12. 72 12-G0 17513.55 6o 12ぞ。 1210