Suppose that the parents of a young child decide to make annual deposits into a saving account, with the first deposit being made on the child's fifth birthday and the last deposit being made on the 15th birthday. Then, starting on the child's 18th birthday (EOY), four withdrawals will be made. The sequence of the amounts of withdrawals is $2000, $2400, $2800, and $3200. If the effective annual interest rate is 8% during this period, what are the annual deposits in years 5 through 15? Use a uniform gradient amount in your solution and support your work by drawing the cash flow diagram. Draw the cash flow diagram and solve the problem. Upload your answer in the moodle. Answer:
Suppose that the parents of a young child decide to make annual deposits into a saving account, with the first deposit being made on the child's fifth birthday and the last deposit being made on the 15th birthday. Then, starting on the child's 18th birthday (EOY), four withdrawals will be made. The sequence of the amounts of withdrawals is $2000, $2400, $2800, and $3200. If the effective annual interest rate is 8% during this period, what are the annual deposits in years 5 through 15? Use a uniform gradient amount in your solution and support your work by drawing the cash flow diagram. Draw the cash flow diagram and solve the problem. Upload your answer in the moodle. Answer:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Suppose that the parents of a young child decide to make annual deposits into a saving account, with the first deposit being made on the child's
fifth birthday and the last deposit being made on the 15th birthday. Then, starting on the child's 18th birthday (EOY), four withdrawals will be
made. The sequence of the amounts of withdrawals is $2000, $2400, $2800, and $3200. If the effective annual interest rate is 8% during this
period, what are the annual deposits in years 5 through 15? Use a uniform gradient amount in your solution and support your work by drawing
the cash flow diagram.
Draw the cash flow diagram and solve the problem. Upload your answer in the moodle.
Answer:
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Fir
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