3.1234726EOY8.91020212223242527282930CF$300 A2AaAs?Five deposits are made at the EOYS 2021-2025, as shown in the CF table above. The deposit amounts decrease by 10% every year. I the interestrate is 6% compounded annually, what is the amount in the account at the end of 2030

The deposit value from EOY 21 to 25 decreases by 10%. 21 300 22 270 23 243 24 218.7 25…

3. 1 2 3 4 15 7. EOY 20 8 9. 10 21 22 23 24 25 26 27 28 29 30 CF $300 A A3 As As Five deposits are made at the EO 2021-2025, as shown in the CF table above. The deposit amounts decease by 10% every e the itret rate is compounded annually what is the amount in the account at the end of 2030 6.

3. 1 2 3 4 15 7. EOY 20 8 9. 10 21 22 23 24 25 26 27 28 29 30 CF $300 A A3 As As Five deposits are made at the EO 2021-2025, as shown in the CF table above. The deposit amounts decease by 10% every e the itret rate is compounded annually what is the amount in the account at the end of 2030 6.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

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Question

3.
1
2
3
4
7
26
EOY
8.
9
10
20
21
22
23
24
25
27
28
29
30
CF
$300 A2
Aa
As
?
Five deposits are made at the EOYS 2021-2025, as shown in the CF table above. The deposit amounts decrease by 10% every year. I the interest
rate is 6% compounded annually, what is the amount in the account at the end of 2030

Expert Solution

Step 1

The deposit value from EOY 21 to 25 decreases by 10%.

21	300
22	270
23	243
24	218.7
25	196.83

Using the compounding formula,

Amount = $P r i n c i p a l {(1 + \frac{r}{n})}^{n t}$

For deposit $300 the maturity value in EOY 30,

Amount = $300 {(1 + \frac{0.06}{1})}^{1 * 10}$

= 537

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