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You have $19,000 you want to invest for the next 28 years. You are offered an investment plan that will pay you 8 percent per year for the next 14 years and 12 percent per year for the last 14 years. a.How much will you have at the end of the 28 years?

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hyderali230

Answer:

We will have $272,733 at the end of the 28 years.

Explanation:

Investment Amount = $19,000

Amount after first 14 years = $19,000 x ( 1 + 8% )^14

Amount after first 14 years = $19,000 x ( 1 + 0.08 )^14

Amount after first 14 years = $19,000 x ( 1.08 )^14

Amount after first 14 years = $19,000 x 2.9372

Amount after first 14 years = $55,806.80

Amount after second 14 years = $55,806.80 x ( 1 + 12% )^14

Amount after second 14 years = $55,806.80 x ( 1 + 0.12 )^14

Amount after second 14 years = $55,806.80 x ( 1.12 )^14

Amount after second 14 years = $55,806.80 x 4.8871

Amount after second 14 years = $272,733.41

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