Suppose an individual makes an initial investment of $1400 in an account that earns 7.8%, compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of each month for the next 5 years (so that the account balance will be reduced to $0). (Round answers to the nearest cent.) a) How much is in the account after the last deposit is made? b) How much was deposited in total? c) What is the amount of each withdrawal? d) What is the total amount withdrawn?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 24P
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Suppose an individual makes an initial investment of $1400 in an account that earns 7.8%,
compounded monthly, and makes additional contributions of $100 at the end of each month for a
period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of
each month for the next 5 years (so that the account balance will be reduced to $0). (Round
answers to the nearest cent.)
a) How much is in the account after the last deposit is made?
b) How much was deposited in total?
c) What is the amount of each withdrawal?
d) What is the total amount withdrawn?

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