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Determine the accumulated value of the investment

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$10,000 is used to purchase an appropriate size annuity that has level annual payments for 14 years. The price of the annuity is based on an effective annual rate of 10.6%. As each payment is received, it is put into a fund that earns an effective annual rate of 5.8%.

(a) Determine the accumulated value of the investment at the end of 14 years. (2 decimal places)

(b) If the $10,000 were put into a fund that was to produce the same final value after 14 years, what annual effective rate would that fund have to offer? (2 decimal places)

Reference no: EM131850997

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