Question: **** please hand-write/type out work, not using a spreadsheet **** 20,000 dollars is deposited into an account A at time zero and every year, 3000

**** please hand-write/type out work, not using a spreadsheet ****

20,000 dollars is deposited into an account A at time zero and every year, 3000 dollars is added to it. The account pays 5 percent yearly effective interest and each year, the interest is paid to the account owner (is NOT rolled over into the account). This continues for 20 years.

a. If the interest is deposited into a non interest bearing account B, what is the balance in account B at the end of 20 years? What is the total amount in accounts A and B at the end of 20 years?

b. Now assume that account B pays 4 percent interest compounded yearly. What is the ending amount in account B, and what is the owners yield rate (accounts A and B together)?

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