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Math Help - Simple Annuities #3

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    Ife
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    Simple Annuities #3

    This is the last question i have here. It reads:

    Frank deposited $1,250 at the end of every month into a retirement account for the last 15 years. The account paid interest of J_{12}= 15.4% for the 1st 6 years. This rate is dropped to J_{12}=10% for the next 2 yrs until it became J_{12}=12% for the remainder of the period.

    a. How much money does he have in the fund at the end of the 15 yrs?

    b. What is the total interest earned in the 15 yrs?

    c. How much interest did he earn during the 7th year?

    I'd like some guidance please???

    I'm thinking that the total in the fund would be calculated like this:  1250 * \left[  \left[ \frac{(1+ \frac{.154}{12})^{12*6}-1}{( \frac{.154}{12})} \right] + \left[ \frac{(1+ \frac{.10}{12})^{12*2}-1}{( \frac{.10}{12})} \right] + \left[ \frac{(1+ \frac{.12}{12})^{12*7}-1}{( \frac{.12}{12})} \right] \right]
    Thanks.
    Last edited by mr fantastic; December 8th 2009 at 01:23 AM. Reason: Changed post title
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