Question

John invests RM25000 in an account for 8 years. The investment account pays 8% compounded
semi-annually for the first three years and 10% compounded quarterly for the rest of the period.

i. Calculate the future value of the investment

ii. Compute the interest earned from John’s investment.

Answer 1

"The investment account pays 8% compounded semi-annually for the first three years"
---> 6 interest periods at a rate of .04

" 10% compounded quarterly for the rest of the period."
-----> 20 interest periods at .025 per period


amount = 25000(1.04)^6 (1.025)^20
= ....