Answer:
The correct answer is B.
Explanation:
Giving the following information:
Anne plans to save $40 a week, starting next week, for ten years and earn a rate of return of 4.6 percent, compounded weekly. After the ten years, she will discontinue saving and invest her account at 6.5 percent, compounded annually.
First, we calculate the final value of the first ten years:
Effective rate= 0.046/52= 0.000885
n=52*10= 520
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {40*[(1.000885^520)-1]}/0.000885= 26,398.57
Now, we can calculate the number of years.
n=[ln(FV/PV)]/ln(1+i)
n= [ln(50,000/26,398.57)]/ln(1+0.065)
n= 10.14 years