Today, Makeba deposited $450,000 in an instrument that pays annual interest of 6%, compounded monthly. She intends to keep it in that instrument for 2 years, after which she will transfer the balance in the account to a long-term fund that pays interest of 10% per annum, compounded monthly.

i. How much interest would be earned over the period of the initial investment?

ii. What would be the value of the fund 10 years after Makeba made her first deposit (ten years from today)?

Answer rating: 100% (QA)

i To calculate the interest earned over the period of the initial investment we can use the f... View the full answer