- (a) Nathan and Nelle (twins) got an inheritance of $550,000 upon turning twenty one. Nathan decides to invest his money with ABC Financial. If ABC Financial pays simple interest at a rate of 6.75% per annum, how long in years, will it take Nathan’s money to grow to $720,000?
(b) Nelle decided to invest her money with XYZ Financial. If XYZ Financial doubles the inheritance in the same amount of time that Nathan got his money, what was the interest rate charged by XYX Financial?
- Jake was born on January 1st 1992. On the last day of the month Jake’s mom opened a college fund for him by depositing $500 into an account that pays 4% per annum compounded monthly. She intends to deposit a similar amount on the last day of each month until Jake is 20 years old.
She will then stop depositing money into the account. However, she will leave the money in the account until Jake is ready to attend college.
- How much money will be in the account when Jake turns 20 years?
- If Jake has decided that he would begin attending college when he is 27. How much money would then be in the account?
- Jake intends to finance his college education by making forty eight (48) equal monthly withdrawals from the account. How much will each withdrawal be?