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How much will the investments be worth at the end

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Question - Mark Johnson saves a ?xed percentage of his salary at the end of each year. This year he saved $5000. For the next 6 years, he expects his salary to increase at an 5% annual rate, and he plans to increase his savings at 4% annual rate. He invests his money in the stock market. Thus, there will be seven end-of-year investments (the initial $5000 plus six more). Solve the problem using the geometric gradient factor. How much will the investments be worth at the end of 7 years if they increase in the stock market at a 8% annual rate?

Reference no: EM133108332

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