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 At the end of the fifth year, one-half of the account balance is withdrawn; $2,000 is deposite annually for five more years (starting in the 6th year), with the total balance withdrawn at the end of the fifteenth year. There are no additional payments in years 11-15. a. Choose the correct cash flow diagram. b. If the account earns interest at the rate of 7% per year, how much is withdrawn at the end of five years? c. If the account continues to earn interest at the rate of 7% per year, how much is withdrawn at the end of 15 years? Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year. a. Choose the correct cash flow diagram below. O A. C OB.

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 At the end of the fifth year, one-half of the account balance is withdrawn; $2,000 is deposite annually for five more years (starting in the 6th year), with the total balance withdrawn at the end of the fifteenth year. There are no additional payments in years 11-15. a. Choose the correct cash flow diagram. b. If the account earns interest at the rate of 7% per year, how much is withdrawn at the end of five years? c. If the account continues to earn interest at the rate of 7% per year, how much is withdrawn at the end of 15 years? Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year. a. Choose the correct cash flow diagram below. O A. C OB.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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 At the end of the fifth year, one-half of the account balance is withdrawn; $2,000 is deposited
annually for five more years (starting in the 6th year), with the total balance withdrawn at the end of the fifteenth year. There are no additional payments in years 11-15.
a. Choose the correct cash flow diagram.
b. If the account earns interest at the rate of 7% per year, how much is withdrawn at the end of five years?
c. If the account continues to earn interest at the rate of 7% per year, how much is withdrawn at the end of 15 years?
Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year.
a. Choose the correct cash flow diagram below.
O A.
O C.
F5/2
1 2 3 4 5
'
1K 1K 1K 1K 1K
2K 2K 2K 2K 2K
6 7 8 9 10 11 12 13 14 15
F6/2
2 3 4 56
.
1K 1K 1K 1K 1K
F15
2K 2K 2K 2K 2K
F15
7 8 9 10 11 12 13 14 15
Q
C
O B.
O D.
F5/5
2 3 4 5
1K 1K 1K 1K 1K
1
1K 1K 1K 1K 1K
6
8 9 10 11 12 13 14 15
2K 2K 2K 2K 2K
2K 2K 2K 2K 2K
2 3 4 5 6
F5/2
F15
7 8 9 10 11 12 13 14 15
F15
Q
Q

b. The amount of $
is withdrawn at the end of 5 years.
c. The amount of $ is withdrawn at the end of 15 years.

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