Ryan plans to deposit his annual bonus into a savings account that pays 3% interest compounded annually. The size of his bonus increases by $1000 each year, and the initial bonus amount he will deposit at the end of year 1 is $2500. A) Determine how much will be in the account after the 6th deposit? B) What’s the future value if he only plans to deposit his annual bonus for 8 years? C) What’s the future value if he only plans to deposit his annual bonus for 8 years, but also plans to skip the deposits at the end of years 3 and 6?
Ryan plans to deposit his annual bonus into a savings account that pays 3% interest compounded annually. The size of his bonus increases by $1000 each year, and the initial bonus amount he will deposit at the end of year 1 is $2500. A) Determine how much will be in the account after the 6th deposit? B) What’s the future value if he only plans to deposit his annual bonus for 8 years? C) What’s the future value if he only plans to deposit his annual bonus for 8 years, but also plans to skip the deposits at the end of years 3 and 6?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....
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Ryan plans to deposit his annual bonus into a savings account that pays 3% interest compounded annually. The size of his bonus increases by $1000 each year, and the initial bonus amount he will deposit at the end of year 1 is $2500.
A) Determine how much will be in the account after the 6th deposit?
B) What’s the future value if he only plans to deposit his annual bonus for 8 years?
C) What’s the future value if he only plans to deposit his annual bonus for 8 years, but also plans to skip the deposits at the end of years 3 and 6?
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