8. Mr. Diamond expects to invest $1000 per year for each of the next 20 years in an investment plan that pays 10% per year, compounded annually. At the end of the 20th year, he expects to withdraw the balance in his investment plan and deposit it in a savings account. This savings account pays 6% per year, compounded monthly. Mr. Diamond wants to withdraw a fixed amount from this savings account each month, for a total of five years. How large may this fixed amount be? Ans. A- $1107.13

8. Mr. Diamond expects to invest $1000 per year for each of the next 20 years in an investment plan that pays 10% per year, compounded annually. At the end of the 20th year, he expects to withdraw the balance in his investment plan and deposit it in a savings account. This savings account pays 6% per year, compounded monthly. Mr. Diamond wants to withdraw a fixed amount from this savings account each month, for a total of five years. How large may this fixed amount be? Ans. A- $1107.13

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 24P

See similar textbooks