Mapuleng deposit 1500 at the end of every month into an account that earns 12.5% interest per year,compounded monthly. After two years, she stops making this monthly contributions because the interest rate changes to 15% per year compounded every two months. if no withdrawals or deposits are made for four years the balance in the account will be
Solution
Given that
Number of years
Number of times, the interest was compounded per year (monthly compounded)
Interest rate (annually)
Interest rate (monthly)
Monthly deposit
For two years, the number of times, the interest was compounded = 24
After two years, the interest rate is
Using excel, the future value after four years is calculated as
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