Question

You have $19,750 you want to invest for the next 22 years. You are offered an investment plan that will pay you 9 percent per year for the next 11 years and 13 percent per year for the last 11 years. a. How much will you have at the end of the 22 years

Answer 1

Answer:

$195,488.6

Explanation:

The computation of the amount at the end of the 22 years is shown below

The Amount at the end of 1st 11 years is

= Principal × (1 + interest rate)^number of years

= $19,750 × (1 + 0.09)^11

= $50,963.42  

Now the amount at the end of the last 11 years is

= $50,963.42 × (1 + 0.13)^11

= $195,488.6

hence, the value at the end of the 22 years is $195,488.60