Calculate the effective interest rate for yuni

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Yuni is 27 years old and wishes to secure her future by saving $350 per week into an investment that pays 6.5% p.a. compounding weekly. She is looking forward to a career in Accounting and is hoping to work in the industry until she retires at age 55.

a) How much will Yuni have in retirement savings if he contributes the $350 at the end of each week? Show formula, variables, calculation and a concluding statement in your response.

b) How much will Yuni have in retirement savings if he contributes the $350 at the start of each week? Show formula, variables, calculation and a concluding statement in your response.

c) Explain why there is a difference between the two amounts determined in parts a) and b) above?

d) Calculate the effective interest rate for Yuni and explain what this number means.

e) Yuni wants to set up a college fund for her grandchild. She is aiming to be able to pass on $100 000 in 15 years' time. How much does Yuni need to set aside today into a college fund for his grandchild, assuming the fund earns 7.50% per annum?

Reference no: EM132785606

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