To complete your last year in business school and then go through law school, you will...
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To complete your last year in business school and then go through law school, you will need $25,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $25,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 7% interest a sum of money that is sufficient to provide the four payments of $25,000 each. His deposit will be made today. Do not round intermediate calculations. Round your answers to the nearest cent. If your answer is zero, enter "0". a. How large must the deposit be? $ b. How much will be in the account immediately after you make the first withdrawal? After the last withdrawal? After the first withdrawal: $ After the last withdrawal: $ To complete your last year in business school and then go through law school, you will need $25,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $25,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 7% interest a sum of money that is sufficient to provide the four payments of $25,000 each. His deposit will be made today. Do not round intermediate calculations. Round your answers to the nearest cent. If your answer is zero, enter "0". a. How large must the deposit be? $ b. How much will be in the account immediately after you make the first withdrawal? After the last withdrawal? After the first withdrawal: $ After the last withdrawal: $
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To calculate the size of the deposit needed to cover the four annual withdrawals of 25000 each at an ... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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