Question

Y is placed in an account which caries a nominal annual interest rate of 2.4% compounded quarterly for the first 10 years and a nominal annual discount rate of 3.6% convertible monthly for the next 5 years. The value of this account 15 years after inception is $10000. Find Y

Answer 1

	Compounding
	A	P*(1+r)^n
	Y	Principal
	n	number of compunding
	r	Rate of intrest for compunding period
	A	Resulting amount at end
in given question
	A= 10000$
	here two different interest rates and compunding factors are there
	we have to find out "p"
	year	computation	discounting factor	n	r
	`1-10	1/(1+0.006)^40	0.7871922	`10*4=40	`0.024/4=0.006	Quarterly for 10 years
	`11-15	1/(1+0.003)^60	0.8354953	`5*12=60	`0.036/12=0.003	monthly for 5 years
	Y	`=A/(1+r)^n
		`10000/((1.006^40)*(1.003^60))
		$6,576.95