When Lisa was first hired by the Environmental Protection Agency as a research scientist,
she had sufficient income to deposit $600 each quarter into an IRA paying 10% interest,
compounded quarterly. The quarterly deposits lasted for 12 years.
a) How much was in the account at the end of 12 years?
b) Because of her parents’ nursing home costs, Lisa was not able to continue these
deposits. Instead, she deposited the entire IRA account into a 30-year certificate of
deposit earning 12% compounded monthly. What was the value of the account when
it matured?
Omega Instruments has budgeted $300,000 per year to pay for certain ce- ramic parts over the next 5 years. If the company expects the cost of the parts to increase uniformly according to an arith- metic gradient of $1 0,000 per year, what is it expecting the cost to be in year 1, if the interest rate is 10% per year?
pls pls pls pls pls help, much thanks!
1 answer
1 answer