Question

Jake purchased a 25-year accumulating bond with nominal interest of 6.5% compounded annually in February 1998 for $26,000.
a)How much interest would it earn by February 2009?

Answer 1

\[A=A _{0}(1+\frac{r}{n})^{nt}\]

Answer 2

Use that equation with n = 1 and t = 11 to find the value in February of 2009. Then subtract $26,000 from that answer to find the interest paid in those 11 years.

Answer 3

thanks!

Answer 4

yw