Solve the following problems. Draw the cash flow diagram for each problem and use the interest rate with five decimal places. Box your final answer and upload the picture of your complete solution. ) 1. What is the amount of 10 equal annual deposits that can provide five annual withdrawals, when a first withdrawal of $10,000 is made at the end of year 11, and subsequent withdrawals increase at the rate of 10% per year over the previous year’s, if a. the interest rate is 8%, compounded annually? b. The interest rate is 10%, compounded annually?

Solve the following problems. Draw the cash flow diagram for each problem and use the interest rate with five decimal places. Box your final answer and upload the picture of your complete solution. ) 1. What is the amount of 10 equal annual deposits that can provide five annual withdrawals, when a first withdrawal of $10,000 is made at the end of year 11, and subsequent withdrawals increase at the rate of 10% per year over the previous year’s, if a. the interest rate is 8%, compounded annually? b. The interest rate is 10%, compounded annually?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

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Today, you invest ₱100,000 into a fund that pays 25% interest compounded annually. Three years later, you borrow ₱50,000 from a bank at 20% annual interest and invest in the fund. Two years later, you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal you start taking ₱20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was withdrawn? Note: Draw the cashflow diagram
Today, you invest ₱100,000 into a fund that pays 25% interest compounded annually. Three years later, you borrow ₱50,000 from a bank at 20% annual interest and invest in the fund. Two years later, you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal you start taking ₱20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was withdrawn? Note: Draw the cashflow diagram and solve using the formula of annuities
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