Lyle O 'Keefe invests $27,500 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 9 years. At the end of the 9 years, Lyle withdrew the accumulated amount of money.
| (a) |
Compute the amount Lyle would withdraw assuming the investment earns simple interest. |
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$ |
| (b) |
Compute the amount Lyle would withdraw assuming the investment earns interest compounded annually. (Round to 2 decimal places, e.g. 25,250.25. Hint: Use tables in text.) |
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$ |
| (c) |
Compute the amount Lyle would withdraw assuming the investment earns interest compounded semiannually. (Round to 2 decimal places, e.g. 25,250.25. Hint: Use tables in text.) |
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$
Amy Monroe wants to create a fund today that will enable her to withdraw $27,480 per year for 8 years, with the first withdrawal to take place 5 years from today. If the fund earns 9% interest, how much must Amy invest today? (Round the answer to zero decimal places, e.g. 120,250. Hint: Use tables in text.)
| Investment amount |
$
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