Find the final aount in the ollowing retirement account in w

Find the final aount in the ollowing retirement account, in which the rate of rel on the accounl and the regular contribution change over time $268 per month invested at 5% compounded monthly or 3 years then 682 per month invested at 6% compounded monthiy or 3 ears What is the amount in the account after 6 years? (Round to the nearest dollar as needed)

Solution

For 1st 3 years: FV = PMT [(1+i) ^n - 1]/i

PMT = $ 268; i = 0.05/12 =0.004167; n =5*12 = 60

FV = 268[1.004167^60 -1]/0.004167

= $ 29,993.24

For 3 yrs; i = 0.06/12 =; n = 3*12 = 36

FV = 682[ (1.005^36 -1)/0.005

= 682*0.1967/0.005

= $ 26,829.88

Total amount = $ 26,829.88 + $ 29,993.24

= $ 56,823.12

= $56,823