- [Maximum mark: 7]
Give answers to this question correct to two decimal places.
Pierre invests 1500 euros (EUR) at the end of each month for 10 years into a savings plan that pays a nominal annual interest rate of 3.6% compounded monthly.
(a) Calculate the value of Pierre’s savings plan at the end of the 10 years. [3]
At the end of the 10 years, Pierre withdraws 100 000 EUR from the savings plan to use as a deposit on a house.
Pierre invests the remainder into another account for 15 years at a nominal annual interest rate of 4.5% compounded quarterly.
(b) Calculate the amount in Pierre’s account at the end of this time. [4]