At the end of each year mr smith deposits 6000 into an


At the end of each year Mr. Smith deposits $6,000 into an investment fund. The fund pays out interest each year at an annual effective interest rate of 6%. Mr. Smith is only able to reinvest this interest at an annual effective interest rate of 4%. Assuming Mr. Smith continues to make his $6,000 deposits for twenty years, that he always immediately deposits all the interest paid out into the 4% account, and that makes no withdrawals, what’s the accumulated value of Mr. Smith’s investments at the time of the last deposit?

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Financial Management: At the end of each year mr smith deposits 6000 into an
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