Michael is updating his estate plan for himself and his family. He would like to provide an income of $3000 every month starting 10.5 years from now and continuing for the next 20 years. He has started his account with an initial deposit of $10,000 and he knows his life insurance, maturing in 5 years, will have a cash value of $150,000. To make up the difference, Michael has decided to make monthly deposits in the account. How much should each deposit be if all interest is computed at 6% compounded monthly? Note: Cannot use Excel/Spreadsheet.
Michael is updating his estate plan for himself and his family. He would like to provide an income of $3000 every month starting 10.5 years from now and continuing for the next 20 years. He has started his account with an initial deposit of $10,000 and he knows his life insurance, maturing in 5 years, will have a cash value of $150,000. To make up the difference, Michael has decided to make monthly deposits in the account. How much should each deposit be if all interest is computed at 6% compounded monthly? Note: Cannot use Excel/Spreadsheet.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 23P
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Michael is updating his estate plan for himself and his family. He would like to provide an income of $3000 every month starting 10.5 years from now and continuing for the next 20 years. He has started his account with an initial deposit of $10,000 and he knows his life insurance, maturing in 5 years, will have a cash value of $150,000. To make up the difference, Michael has decided to make monthly deposits in the account. How much should each
deposit be if all interest is computed at 6% compounded monthly?
Note: Cannot use Excel/Spreadsheet.
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