Starting next year, you will need $5,000 annually for 4years to complete your education. (One year from today you will withdraw the first $5,000.)Your uncle deposits an amount today in a bank paying 6% annual interest, which will providethe needed $5,000 payments.a. How large must the deposit be?b. How much will be in the account immediately after you make the first withdrawal?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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Starting next year, you will need $5,000 annually for 4
years to complete your education. (One year from today you will withdraw the first $5,000.)
Your uncle deposits an amount today in a bank paying 6% annual interest, which will provide
the needed $5,000 payments.
a. How large must the deposit be?
b. How much will be in the account immediately after you make the first withdrawal?

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