Mr. Yiu just wins a lottery of $6,261,362 today. He opens a bank account and puts the whole amount in the bank account which gives him 3.4% p.a. interest rate. He will withdraw $100,000 from the account today. From next year onwards he will withdraw an amount that is 10% more than the previous year's amount. That means he will withdraw $100,000 x (1+10%) next year, and $100,000 x (1+10%)? two years later and $100,000 x (1+10%)³ three years later, and so on. (Hint: This is similar to the education fund question.) A. Based on Mr. Yiu's withdrawal plan above, calculate the number of years he can withdraw money from the account.

Mr. Yiu just wins a lottery of $6,261,362 today. He opens a bank account and puts the whole amount in the bank account which gives him 3.4% p.a. interest rate. He will withdraw $100,000 from the account today. From next year onwards he will withdraw an amount that is 10% more than the previous year's amount. That means he will withdraw $100,000 x (1+10%) next year, and $100,000 x (1+10%)? two years later and $100,000 x (1+10%)³ three years later, and so on. (Hint: This is similar to the education fund question.) A. Based on Mr. Yiu's withdrawal plan above, calculate the number of years he can withdraw money from the account.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 4MC: Refer to the present value table information on the previous page. What amount should Brett have in...

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Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
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