What amount should be deposited in the present so that $50,000 can be withdrawn every year for
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Q2. When Angelica turns 3 years old, her parents decide to make an investment fund to pay her College tuition. The withdrawal instructions are the following: $110,000 in her 18th birthday, $120,000 in her 19th birthday, $130,000 in her 20th birthday, $140,000 in her 21st birthday and finally $150,000 in her 22nd birthday. To achieve this, Angelica's parents decided to deposit an annual fixed amount of $20,000 every year on Angelica´s 3rd,4th,5th,6th, 7th, 8th, 9 and 10th birthdays, the fund pays 6% per year. What should be the amount of every yearly fixed deposit for her 11th, 12th, 13th, 14th, 15th, 16th and 17th birthdays?
Q3. 3, 4 and 5 years ago three equal deposits were made. These deposits will allow an engineer to withdraw $80,000 for his son's education today, and $80,000 every year for the next 5 years. If the interest rate is 7.5% per year, what was the amount of the three equal initial deposits for the years 3, 4 and 5?
Q4. What will be the present value of a series of 20 annual payments, if the first payment (at the end of the first year), is for $100,000 and each following payment is 5% higher to the previous one? The interest rate is 30% per year compounded annually.
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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