Question

Lucas wins $60000 (after taxes) in the lottery and decides to invest half of it in a 6-year CD that pays 4.63% interest compounded quarterly (4 times/year). He invests the other half in a money market fund that unfortunately turns out to average only 3.72% interest compounded annually over the 5-year period. How much money will he have altogether in the two accounts at the end of the 5-year period?

Answer 1

Im Gettin Help Hold On ,

Answer 2

ok

Answer 3

6-year CD that pays 4.63% interest compounded quarterly (4 times/year).

For the first part:
Amount of money invested: 60000/2 = 30000
Amount he can get after 5 years = P(1+r%)^n
= 30000 [ 1+ (4%/4)] ^ (5x4)
= ...


He invests the other half in a money market fund that unfortunately turns out to average only 3.72% interest compounded annually over the 5-year period.

For the second part:
Amount of money invested: 60000/2 = 30000
Amount he can get after 5 years = P(1+r%)^n
= 30000 [ 1+ (3/72%)] ^ (5)
= ...


Total amount he can get = sum of the above amount.