A child age 3 is given $20,000. The amount is put into savings account which pays 4% compounded annually. If the child takes the money out in eight equal annual payments with the first in 15 years, what is the size of each withdrawal?
A child age 3 is given $20,000. The amount is put into savings account which pays 4% compounded annually. If the child takes the money out in eight equal annual payments with the first in 15 years, what is the size of each withdrawal?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A child age 3 is given $20,000. The amount is put into savings account which pays 4% compounded annually. If the child takes the money out in eight equal annual payments with the first in 15 years, what is the size of each withdrawal?
Transcribed Image Text:A child age 3 is given $20,000. The amount
is put into savings account which pays 4%
compounded annually. If the child takes the
money out in eight equal annual payments
with the first in 15 years, what is the size of
each withdrawal?
$34,633.53
$5144.04
$5349.80
$297.06
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