Homework:Unit 6 Lab Assignment

Question 16, P6-56 (similar to)

Part 1 of 2

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Part 1

(Future value of a complex annuity) Springfield mogul Montgomery Burns, age

75,

wants to retire at age 100 so he can steal candy from babies full time. Once Mr. Burns retires, he wants to withdraw

$0.8

billion at the beginning of each year for

10

years from a special offshore account that will pay

26

percent annually. In order to fund his retirement, Mr. Burns will make

25

equal end-of-the-year deposits in this same special account that will pay

26

percent annually. How much money will Mr. Burns need at age 100, and how large of an annual deposit must he make to fund this retirement account?