Asked by
rainbow skittles
on Dec 14, 2024
Verified
Manuel begins investing $700 per month for 4 years in an account earning 3.8% compounded annually. At the end of this time, he makes a $20,000 lump sum deposit on top of the accumulated investment into another account. At the end of 5 years, this amount has accumulated to $84,000. Based on monthly compounding, determine what the rate of interest that will achieve this goal.
A) 8.01%
B) 8.28%
C) 8.13%
D) 8.33%
E) 8.97%
Monthly Compounding
A method of calculating interest whereby the interest is calculated and added to the principal amount at the end of each month.
- Evaluate the increase in investment returns and grasp the significance of different compounding periods.
- Analyze and compare the outcomes of alternative savings and investment tactics over an extended duration.
Verified Answer
RB
Learning Objectives
- Evaluate the increase in investment returns and grasp the significance of different compounding periods.
- Analyze and compare the outcomes of alternative savings and investment tactics over an extended duration.