An investor puts $100 into Fund X and $100 into Fund Y. Fund Y earns compound interest at the annual rate of j 0, and Fund X earns a simple interest at the annual rate of 1.05j. At the end of 2 years, the amount in fund Y = the amount in fund X. Calculate the amount in Fund Y at the end of 5 years.

Question

An investor puts $100 into Fund X and $100 into Fund Y. Fund Y earns compound interest at the annual rate of j > 0, and Fund X earns a simple interest at the annual rate of 1.05j.  At the end of 2 years, the amount in fund Y = the amount in fund X.  Calculate the amount in Fund Y at the end of 5 years.

anonymous · Answer

WAH!  Why does everyone hate my questions?!

barrycarter · Answer

Hint: how much does fund Y have after 1 year?

anonymous · Answer

fund x or y?  I don't know about fund y, but if I'm correct, after one year fund x should be 105j.

anonymous · Answer

@barrycarter :: fund x or y?  I don't know about fund y, but if I'm correct, after one year fund x should be 105j....?

barrycarter · Answer

OK, fund Y has 1 + j at the end of year 1, that's what an interest rate of j means

anonymous · Answer

soooo, 100 +j after one year?

barrycarter · Answer

Yes, sorry. Well 100*(1+j) if j is given as a decimal.

anonymous · Answer

ok. and after five years it would be 100*(1+5j)?  but this is all the info i was given, and I have to come out with a whole number?  my choices are 150, 152, 157, 161, and 165.

barrycarter · Answer

This is getting complicated to do here, can you meet me at: http://www.scribblar.com/wwcdp0qj