Mrs. Kim has decided to set aside some money for chip and his two brothers’ college education. She plans to deposit equal amounts, D, in the bank, every year starting year 2010 up to year 2018. The interest rate at the bank is 18% compounded quarterly. Mrs. Potts foresees that she will start withdrawing her money at the end of the year 2021 and will continue to withdraw annually until the end of year 2028. She plants to withdraw ₱250,000 at the end of 2021 but because of some economic factors she believes that the amount of withdrawal should increase by ₱60,000 every year thereafter. What is the effective interest per year? (Place your answer in percentage format and round off to the nearest 2 decimal places) What is the present value at year 2009? (Round off to the nearest 2 decimal places) How much should Mrs. Kim deposit every year from 2010 to 2018? (Round off to the nearest 2 decimal places) If Mrs. Kim decides to withdraw her money as a single lump sum amount at the end of year 2018, how much would she get? (Round off to the nearest 2 decimal places)
Mrs. Kim has decided to set aside some money for chip and his two brothers’ college education. She plans to deposit equal amounts, D, in the bank, every year starting year 2010 up to year 2018. The interest rate at the bank is 18% compounded quarterly. Mrs. Potts foresees that she will start withdrawing her money at the end of the year 2021 and will continue to withdraw annually until the end of year 2028. She plants to withdraw ₱250,000 at the end of 2021 but because of some economic factors she believes that the amount of withdrawal should increase by ₱60,000 every year thereafter. What is the effective interest per year? (Place your answer in percentage format and round off to the nearest 2 decimal places) What is the present value at year 2009? (Round off to the nearest 2 decimal places) How much should Mrs. Kim deposit every year from 2010 to 2018? (Round off to the nearest 2 decimal places) If Mrs. Kim decides to withdraw her money as a single lump sum amount at the end of year 2018, how much would she get? (Round off to the nearest 2 decimal places)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter14: Planning For Retirement
Section: Chapter Questions
Problem 2FPE
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Mrs. Kim has decided to set aside some money for chip and his two brothers’ college education. She plans to deposit equal amounts, D, in the bank, every year starting year 2010 up to year 2018. The interest rate at the bank is 18% compounded quarterly. Mrs. Potts foresees that she will start withdrawing her money at the end of the year 2021 and will continue to withdraw annually until the end of year 2028. She plants to withdraw ₱250,000 at the end of 2021 but because of some economic factors she believes that the amount of withdrawal should increase by ₱60,000 every year thereafter.
- What is the effective interest per year? (Place your answer in percentage format and round off to the nearest 2 decimal places)
- What is the
present value at year 2009? (Round off to the nearest 2 decimal places) - How much should Mrs. Kim deposit every year from 2010 to 2018? (Round off to the nearest 2 decimal places)
- If Mrs. Kim decides to withdraw her money as a single lump sum amount at the end of year 2018, how much would she get? (Round off to the nearest 2 decimal places)
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