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Determining the annual interest rate

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(a) Susana starts a paper route today. Every year she deposits N$500 into her bank account, which earns 4 percent per annum, compounded quarterly. After 10 years, she will use the entire balance in her bank account to invest in a contract that pays 9 percent per annum compounded annually for a further 5 years. How much will she have at the end of 15 years?

(b) Suppose you wish to invest $2,000 today so that you have $6,000 six years from now. What must the annual interest rate be in order to achieve your goal if interest is compounded monthly?

Reference no: EM132613540

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