What is the two-year effective interest rate

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You plan to save for your retirement by depositing 15 payments of $10,000 into an account every other year. The first payment is made one year from today and the remaining 14 payments come every other year (i.e. 1st payment is at year 1, 2nd payment at year 3, 3rd payment at year 5,….,15th payment at year 29).You assume investments in this account will earn a nominal rate of return of 10%, compounded annually.

a. What is the 2-year effective interest rate?

b. What is the future value of your deposits at year 29?

c. If you plan to make 10 annual withdrawals from your retirement account starting one year after your last deposit, how much will your annual withdrawal be?( using the same rate of return of 10%)

Reference no: EM131448323

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