My girlfriend was doing some maths revision yesterday and came across these 2 questions, only the first had a solution in the answer section, the second just had a figure. So the questions are as follows.
1.) Tom puts £200 annually into a bank account earning 11.5% compound interest per year. How much will tom have after 12 years.
2.) Lisa puts £2000 annually into a bank account earning 10.5% compound interest per annum. How much money will be in Lisa's account at the end of the eight year?
So my problem is this:
Question 1 I got right anyway and my answer matched the one in the book, But question 2 still baffles me, I can get the answer it says in the book but not in an actual formulae. So I just wondered if anyone here can tell me what it should be. My workings are as follows.
Question 1 Solution
200(1-1.11512)
------------------- = 4682.28
(1-1.115)
Answer in Book = 4682.28
Question 2 Solution
2000(1-1.1058)
----------------- = 23291.22
(1-1.105)
Answer in book = 25736.79
Which is made by taking it over 9 years and subtracting an annual payment of £2000
2000(1-1.1059)
----------------- - 2000 = 25736.79
(1-1.105)
Someone please tell me whose right, me or the book.
+1 For anything constructive.
1.) Tom puts £200 annually into a bank account earning 11.5% compound interest per year. How much will tom have after 12 years.
2.) Lisa puts £2000 annually into a bank account earning 10.5% compound interest per annum. How much money will be in Lisa's account at the end of the eight year?
So my problem is this:
Question 1 I got right anyway and my answer matched the one in the book, But question 2 still baffles me, I can get the answer it says in the book but not in an actual formulae. So I just wondered if anyone here can tell me what it should be. My workings are as follows.
Question 1 Solution
200(1-1.11512)
------------------- = 4682.28
(1-1.115)
Answer in Book = 4682.28
Question 2 Solution
2000(1-1.1058)
----------------- = 23291.22
(1-1.105)
Answer in book = 25736.79
Which is made by taking it over 9 years and subtracting an annual payment of £2000
2000(1-1.1059)
----------------- - 2000 = 25736.79
(1-1.105)
Someone please tell me whose right, me or the book.
+1 For anything constructive.