# TVM

In three years an investor deposits the first of eight \$1,000 payments into a special fund.The fund will earn interest at the rate of 5% per year until the end of the fifth year. Thereafter, all money accumulate in the fund will earn a reduced interest rate of 4% compound annually until the end of the tenth year.How much money will the investor have in the fund at the end of ten years assuming no withdraws are made What’s the meaning?I dont get it

Look at a time line 0…1…2…3…4…5…6…7…8…9…10 …1k…1k…1k…1k…1k…1k…1k…1k …5…5…5…4…4…4…4…4 PMT=1000 N=3 I/Y=5 FV=? FV=3152.5 2nd CLR TVM PV=3152.5 PMT=1000 N=5 I/Y=4 FV ? 9251.82 CP

I like that CP. using timeline usually make things more understandable

Whys is N equal to three in the first part of the question? Shouldn’t it be equal to 5??

read the question and compare with the timeline above In three years an investor deposits the first of eight

thank you, gosh, starting to go crazy, thank you very much!

You are right! Thanks

sneaky…nice