A student plan to deposit P1, 500 in the bank now and another P3, 000 for the next 2 years. If he plans to withdraw P5, 000 3 years after his last deposit for the purpose of buying shoes, what will be the amount of money left in the bank after one year of his withdrawal? Effective annual interest rate is 10%.

A student plan to deposit P1, 500 in the bank now and another P3, 000 for the next 2 years. If he plans to withdraw P5, 000 3 years after his last deposit for the purpose of buying shoes, what will be the amount of money left in the bank after one year of his withdrawal? Effective annual interest rate is 10%.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Starting next year, you will need $15,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $15,000.) Your uncle deposits an amount today in a bank paying 5% annual interest, which will provide the needed $15,000 payments. How large must the deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will be in the account immediately after you make the first withdrawal? Do not round intermediate calculations. Round your answer to the nearest cent. $
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