Question: At time t = 0, Sirdar invests $2 000 in a fund earning j 4 = 8% p.a., but payable annually. He reinvests each interest

At time t = 0, Sirdar invests $2 000 in a fund earning j4 = 8% p.a., but payable annually.

He reinvests each interest payment in individual separate funds each earning j4 = 9% p.a., but payable annually.

The interest payments from the separate funds are accumulated in a side fund that guarantees an annual effective rate of 7%.

Determine the total value of all funds at t = 10.

a.

$4 339

b.

$4 485

c.

$3 964

d.

$4 395

e.

$3 649

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