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Bob deposits $100 today and another $200 in 5 years into an account paying simple interest of
10% per year. Judy deposits $100, n years from today, and another $200, 2n years from today
into an account paying compound interest of 8%. At the end of 10 years, their accumulated
values are equivalent. Find n.
plz help!
 Oct 4, 2013
 #1
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Consider Bob first
Every year that his first $100 is invested he gets a flat $10 interest
Every year that the second deposit of $200 is invested he gets a flat $20 interest (plus the $10 that he is getting for he first $100
So this is how much he will have at then end of each year up to 10years
$110, $120, $130, $140, $150
$350, $380, $410, $440, $470, $500
So after 10 years Bob has $500

Now think about Judy
n must be equal to 1,2,3,4, or 5 because otherwise 2n is more than 10 which is no good.

If n=1 then the first 100 dollars is invested for (10-1) years It will will accumulate to 100*1.08^9
the 200 is invested for (10-2) years. It will will accumulate to 200*1.08^8
Together these add up to $570. Bob only gets $500 so this is too much.

Try n=2 and see if it works.
When you get the correct n, the amount might not be exactly $500 bit it will be close.
 Oct 4, 2013

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