Mohamed is planning for his retirement and wants to invest in a savings account that offers a fixed
annual interest rate of 6%, compounded annually. He decides to deposit $15,000 today and leave it
untouched for 10 years to maximize his savings.
However, after 10 years, he decides to leave the investment for another 5 years, but during this period,
the bank changes the interest rate to 5% per year, compounded annually.
1. Calculate the future value of Mohamed’s investment after the first 10 years at 6% interest.
2. Use the amount obtained in step 1 as the new PV and calculate the final future value after 5 more
years at 5% interest.
3. Determine the total interest earned over 15 years
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