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A young married couple wishes to set up a fund that can be used for various home equipment purchases over the next 10 years. Their forecast is for $10,000 to be needed at the end of year 1, decreasing by $1000 each year thereafter. The fund earns 6% per year. How much money must be deposited to the fund at the end of year 0 to just deplete the fund after the last withdrawal? Given: A, G, n, i Find: P Solution: Draw the CFD and solve the problem

A young married couple wishes to set up a fund that can be used for various home equipment purchases over the next 10 years. Their forecast is for $10,000 to be needed at the end of year 1, decreasing by $1000 each year thereafter. The fund earns 6% per year. How much money must be deposited to the fund at the end of year 0 to just deplete the fund after the last withdrawal? Given: A, G, n, i Find: P Solution: Draw the CFD and solve the problem

Essentials Of Investments
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
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◆ A young married couple wishes to set up a fund that can be used for various home equipment purchases over the next 10 years. Their forecast is for $10,000 to be needed at the end of year 1, decreasing by $1000 each year thereafter. The fund earns 6% per year. How much money must be deposited to the fund at the end of year 0 to just deplete the fund after the last withdrawal? Given: A, G, n, i Find: P Solution: Draw the CFD and solve the problem
Transcribed Image Text:◆ A young married couple wishes to set up a fund that can be used for various home equipment purchases over the next 10 years. Their forecast is for $10,000 to be needed at the end of year 1, decreasing by $1000 each year thereafter. The fund earns 6% per year. How much money must be deposited to the fund at the end of year 0 to just deplete the fund after the last withdrawal? Given: A, G, n, i Find: P Solution: Draw the CFD and solve the problem
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