Troy Long wishes to deposit a single sum of money into a savings account so that five equal annual. withdrawals of $2000 can be made before depleting the funds. If the first withdrawal is made in year 1 after the deposit and if the bank provides an interest rate of 5% per year, how much money should be deposited now? What if Troy decides to withdraw all that he has deposited in the bank now, 5 years later, how much money should he expect to get with an interest rate of 5%? Draw the cash flow diagram.
Troy Long wishes to deposit a single sum of money into a savings account so that five equal annual. withdrawals of $2000 can be made before depleting the funds. If the first withdrawal is made in year 1 after the deposit and if the bank provides an interest rate of 5% per year, how much money should be deposited now? What if Troy decides to withdraw all that he has deposited in the bank now, 5 years later, how much money should he expect to get with an interest rate of 5%? Draw the cash flow diagram.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 31P
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