Question

In 2005, Lee invested $2000 in a fund that pays 5% interest for the first 10 years, and 8% interest for every year thereafter. What will be the value of her investment in the year 2020?

Answer 1

2020 is 10 years at 5% and 5 years at 8%, so

2000 * 1.05^10 * 1.08^5 = 4786.76