A construction company wants to accumulate a given amount to buy a new equipment in the future. 1 company will makes five end of year investments of $100,000 each in an investment portfolio t guarantees to pay 5% compounded annually. a. How much is accumulated amount at the end of five years? b. If the amount in question in part a) is withdrawn in 3 equal amounts (A) staring 2 years a the last deposit, how much will the amount (A) that can be withdrawn? (Draw the Cash flow diagram and solve for each case).
A construction company wants to accumulate a given amount to buy a new equipment in the future. 1 company will makes five end of year investments of $100,000 each in an investment portfolio t guarantees to pay 5% compounded annually. a. How much is accumulated amount at the end of five years? b. If the amount in question in part a) is withdrawn in 3 equal amounts (A) staring 2 years a the last deposit, how much will the amount (A) that can be withdrawn? (Draw the Cash flow diagram and solve for each case).
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 construction company wants to accumulate a given amount to buy a new equipment in the future. 1 company will makes five end of year investments of $100,000 each in an investment portfolio t guarantees to pay 5% compounded annually.
a. How much is accumulated amount at the end of five years?
b. If the amount in question in part a) is withdrawn in 3 equal amounts (A) staring 2 years a the last deposit, how much will the amount (A) that can be withdrawn? (Draw the Cash flow diagram and solve for each case).
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