Jerome is planning on contributing $5,000 at the end of each semi-annual period for 8 years in an investment providing 8.4% compounded quarterly. At the end of this time, Jerome plans to reinvest this amount in another investment that will provide him with the opportunity to withdraw $1,500 per month over 5 years and have $10,000 remaining. Based on monthly compounding, determine what the rate of interest that will achieve this goal.
A) 3.77%
B) 4.07%
C) 4.37%
D) 4.77%
E) 5.07%

Question

Quizplus · Accepted Answer

The correct answer is A because the rate of interest that will achieve this goal is 3.77%.

Jerome Is Planning on Contributing $5,000 at the End of Each