Starting next year, you will need $10,000 annually for 4 years to complete your education. (One year

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Starting next year, you will need $10,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $10,000.) Your uncle deposits an amount today in a bank paying 5% annual interest, which will provide the needed $10,000 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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Fundamentals of Financial Management

ISBN: 978-0324664553

Concise 6th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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