An annual deposits of A1=$1,500 in a saving account is made for 6 years starting year 1. In year 9, a one-time deposit of $3,500 is made. In year 11, a one-time withdrawal of $2,500 is made. Then another series of annual deposits of A2 started for 7 years starting from year 12, increasing by $350 every year. If a one-time withdrawal of $900 was made in year 19 and the present worth of the whole amounts of deposits and withdrawals is $-20,500, what is the value of A2? If the whole life cycle is to be repeated forever with a life cycle of 19 years, what is the capitalized cost and the annual worth? Assume an interest rate of 6%.
An annual deposits of A1=$1,500 in a saving account is made for 6 years starting year 1. In year 9, a one-time deposit of $3,500 is made. In year 11, a one-time withdrawal of $2,500 is made. Then another series of annual deposits of A2 started for 7 years starting from year 12, increasing by $350 every year. If a one-time withdrawal of $900 was made in year 19 and the present worth of the whole amounts of deposits and withdrawals is $-20,500, what is the value of A2? If the whole life cycle is to be repeated forever with a life cycle of 19 years, what is the capitalized cost and the annual worth? Assume an interest rate of 6%.
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 7EB: McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they...
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An annual deposits of A1=$1,500 in a saving account is made for 6 years starting year 1. In year 9, a one-time deposit of $3,500 is made. In year 11, a one-time withdrawal of $2,500 is made. Then another series of annual deposits of A2 started for 7 years starting from year 12, increasing by $350 every year. If a one-time withdrawal of $900 was made in year 19 and the present worth of the whole amounts of deposits and withdrawals is $-20,500, what is the value of A2? If the whole life cycle is to be repeated forever with a life cycle of 19 years, what is the capitalized cost and the annual worth? Assume an interest rate of 6%.
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