Sam is a retiree living on Social Security and the income from his investment is: $100,000 in a 1 year CD is yielding 10.6% interest compounded daily. If he reinvests the principal on the due date of the CD in another 1 year CD paying 9.2% interest compounded daily, find the net decrease in his yearly income from his investment.
2006-10-20 22:35:45 · 4 answers · asked by Nina Karina 1 in Science & Mathematics ➔ Mathematics
-Current accumulated amount:
P = $100,000
r = 0.106
m = 365
Thus,
i = 0.106 / 365
n = 365
A = 100,000 ( 1 + ( 0.106 / 365 ) ^ 365 ≈ 111,180.48.
-Calculate the accumulated amount of the reinvestment.
i = 0.092 / 365
n = 365
A = 100,000 (1 + (0.092 / 365) ^ 365 ≈ 109,635.21
-Calculate the difference between the current investment and the reinvestment to come out with the net decrease
Net decrease = 111,180.48 – 109,635.21
Net decrease ≈ $1545.27
2006-10-20 22:38:54 · answer #1 · answered by c00kies 5 · 0⤊ 0⤋
hahahahahaha lol i dont know??
2006-10-21 05:38:16 · answer #2 · answered by Anonymous · 0⤊ 1⤋
OH MY GOD! how should i know..?
2006-10-21 05:39:49 · answer #3 · answered by Mikki 1 · 0⤊ 0⤋
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2006-10-21 05:45:09 · answer #4 · answered by anusha 2 · 0⤊ 0⤋