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Unformatted text preview: The trustees of a college have accepted a gift of $175,000, but are required to deposit it in an account paying 12% per year, compounded semiannually. They make equal withdrawals at the end of each 6‐month period, but the money must last for 6 years. Find the amount of each withdrawal so that at the end of the 6 years all of the money has been withdrawn. 11. Starting at age 50, a woman puts $1700 at the end of each quarter into a retirement account that pays 7% interest compounded quarterly. When she reaches age 60, she withdraws the entire amount and places it in a mutual fund which pays 9% compounded monthly. From then on, she deposits $400 into the mutual fund at the end of each month. How much is in the account when she reaches 65? 12. Compute the effective rate of a loan with an interest rate of 3.6% compounded monthly and the effective rate of a loan with an interest rate of 3.45% compounded continuously. Which is the better loan for you to take? Some Useful Formulas: 1 1 1 1 1 1 1 1 1 1 1 1 1...
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This note was uploaded on 02/13/2014 for the course MATH 101 taught by Professor Tba during the Fall '08 term at Drexel.
- Fall '08