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Math Help - Superannuation

  1. #1
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    Exclamation Superannuation

    A man invests $40 a week in a superannuation fund. The interest rate for the first 10yrs is 10%pa and for the remaining 20yrs the rate is 12%pa If the interest is worked out monthly, how much is the investmnt worth after 30 years

    Hi Could someone please show me how to do this question? Ive only encountered the very easy questions so i have no idea how to do this one...
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  2. #2
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    Quote Originally Posted by Sunyata View Post
    The interest rate for the first 10yrs is 10%pa and for the remaining 20yrs the rate is 12%pa If the interest is worked out monthly,..........
    Interest method needs clarification:
    do you mean 10% annual compounded monthly?

    If so, then (1 + .10/12)^12 - 1 = .104713... (~10.47%)

    You then need to "fit" that rate to 52 periods (weeks):
    (1 + i)^52 = (1 + .10/12)^12 ; solve for i.
    Last edited by Wilmer; February 4th 2010 at 06:44 PM. Reason: none
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