Evelyn has invested $10,000/year for ten years at an annual interest rate of 8%. Beginning in the 11th year interest rates decrease to 6%. Approximately how much does she have in her account after fifteen years (round to the nearest dollar)?

Question

Quizplus · Accepted Answer

The future value of an annuity is given by the formula:FV = P * ((1 + r)^n - 1) / rwhere:P is the annual paymentr is the annual interest raten is the number of yearsIn this case, P = $10,000, r = 8% for the first 10 years and 6% for the next 5 years, and n = 15.For the first 10 years, the future value is:FV1 = $10,000 * ((1 + 0.08)^10 - 1) / 0.08 = $146,933For the next 5 years, the future value is:FV2 = $10,000 * ((1 + 0.06)^5 - 1) / 0.06 = $13,188The total future value is:FV = FV1 + FV2 = $146,933 + $13,188 = $160,121Rounding to the nearest dollar, the answer is $160,121.

Evelyn Has Invested $10,000/year for Ten Years at an Annual