You plan to make two deposits to your bank account - one deposit today for $X...

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You plan to make two deposits to your bank account - one deposit today for $X and one deposit in four years for $3X. You would like to withdraw $20,000 from this bank account in 6 years, and another $10,000 in 12 years. You can earn an effective rate of 5% per year. What is $X? (7 points) You want to have enough money in the bank to pay for your daughter's education when the time comes. You expect to make 4 annual payments for college, with the first payment in 10 years. The first payment will be for $50,000 and each subsequent payment will be 5% higher than the previous payment. If you expect to earn 5% a year on your deposits, how much you need in the bank now to ensure you will have the desired amount to fund your daughter's education? (7 points) You plan to make two deposits to your bank account - one deposit today for $X and one deposit in four years for $3X. You would like to withdraw $20,000 from this bank account in 6 years, and another $10,000 in 12 years. You can earn an effective rate of 5% per year. What is $X? (7 points) You want to have enough money in the bank to pay for your daughter's education when the time comes. You expect to make 4 annual payments for college, with the first payment in 10 years. The first payment will be for $50,000 and each subsequent payment will be 5% higher than the previous payment. If you expect to earn 5% a year on your deposits, how much you need in the bank now to ensure you will have the desired amount to fund your daughter's education? (7 points)

Answer rating: 100% (QA)

To solve these problems we can use the concept of present value PV and future value FV of money PV r... View the full answer