A person deposits $1,000 in an account each year for five years (starting at the end...

Transcribed Image Text:

A person deposits $1,000 in an account each year for five years (starting at the end of year one). At the end of the fifth year, one-half of the account balance is withdrawn; $2,000 is deposited annually for five more years (starting in the sixth year), with the total balance withdrawn at the end of the 15th year. There are no additional payments in years 11-15. a. Draw the cash-flow diagram. (2 points) b. If the account earns interest at the rate of 5% per year, how much is withdrawn at the end of five years? (6 points) c. If the account continues to earn interest at the rate of 5% per year, how much is withdrawn at the end of 15 years? (7 points) A person deposits $1,000 in an account each year for five years (starting at the end of year one). At the end of the fifth year, one-half of the account balance is withdrawn; $2,000 is deposited annually for five more years (starting in the sixth year), with the total balance withdrawn at the end of the 15th year. There are no additional payments in years 11-15. a. Draw the cash-flow diagram. (2 points) b. If the account earns interest at the rate of 5% per year, how much is withdrawn at the end of five years? (6 points) c. If the account continues to earn interest at the rate of 5% per year, how much is withdrawn at the end of 15 years? (7 points)

Answer rating: 100% (QA)

b 20014 cool 42000 106 3 4 8 D 8 9 10 T X Y Let amount withdrawn be X Y ... View the full answer