Megan received a $208,000 inheritance after taxes from her parents. She invested it at 8% interest compounded quarterly for 5 years. A year after receiving the inheritance, she sold one of her rental properties for $218,000 and invested that money at 7% compounded semiannually for 4 years. Both of the investments have now matured. How much money does Megan have totaling both of these investments?

Question

Arjun

Mathematics

27 September, 04:57

Megan received a $208,000 inheritance after taxes from her parents. She invested it at 8% interest compounded quarterly for 5 years. A year after receiving the inheritance, she sold one of her rental properties for $218,000 and invested that money at 7% compounded semiannually for 4 years. Both of the investments have now matured. How much money does Megan have totaling both of these investments?

+1

Answers (2)

Know the Answer?

Amare Grimes · Answer 1

First u have mutliply$208,000 to 8 then what ever answer you get it then multiply it to what ever get leave the answer u got for the 1st one then you multiply $218,000 to 7 then what ever you got for that one you mulitply that answer to 4, and what ever answer you got for both the 1st and 2nd one you have to add them to answer.

Bridger Dalton · Answer 2

Use the compound interest formula.

A = P * (1 + r/n) ^ (n*t)

where P is the principal, r is the annual rate, n is the number of compoundings per year, and t is the number of years.

For the first investment, ...

A = 208,000 * (1 +.08/4) ^ (4*5) = 309,077.06

For the second investment, ...

A = 218,000 * (1 +.07/2) ^ (2*4) = 287,064.37

Totaling both investments at maturity, Megan has $596,141.43.