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Ais saving for her retirement and contributes $1000 to his accountat the end of...Ais...

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Accounting

Ais saving for her retirement and contributes $1000 to his accountat the end of every year for 40 years. B is also saving for hisretirement and contributes $950 to his account at the beginning ofevery year for 40 years.
If they have the same amount of money after 40 years, what isthe annual effective interest rate?

Answer & Explanation Solved by verified expert
3.7 Ratings (279 Votes)
Let the annual interest rate be r A contributes 1000 annually for 40 years Henceafter 40 years the value of this deposit can be calculated as under Future value    See Answer
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In: AccountingAis saving for her retirement and contributes $1000 to his accountat the end of...Ais saving for her retirement and contributes $1000 to his accountat the end of every year for 40 years. B is also saving for hisretirement and contributes $950 to his account at the beginning ofevery year for 40 years.If they have the same amount of money after 40 years, what isthe annual effective interest rate?

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