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just olya [345]
3 years ago
7

You have been given the choice to invest $1,200 each year in an account that is expected to pay 3 percent per year or you can in

vest in an account that pays 4 percent. What is the difference between the returns, if you choose to invest for four years
Business
1 answer:
gregori [183]3 years ago
8 0

Answer:

$4872.48

Explanation:

future value = amount x annuity factor

Annuity factor = {[(1+r)^n] - 1} / r

r = 4% - 3% = 1%

1200 x [(1.01)^4 - 1] / 0.01 = $4872.48

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