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Aman wishes to set aside some money to fund a special vacation for his family in 7 years. He wil deposit the money today into a savings account that will pay interest at a rate of 6.4% per year. His his goal is to have the equivalent to $44,000 in today's dollars in the account 7 years from today. If the annual inflation rate over the next 7 years is 1.9% how much money should he deposit into the account today? Assume that the man will make no additional deposits or withdrawals into the account after today.)

Aman wishes to set aside some money to fund a special vacation for his family in 7 years. He wil deposit the money today into a savings account that will pay interest at a rate of 6.4% per year. His his goal is to have the equivalent to $44,000 in today's dollars in the account 7 years from today. If the annual inflation rate over the next 7 years is 1.9% how much money should he deposit into the account today? Assume that the man will make no additional deposits or withdrawals into the account after today.)

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 man wishes to set aside some money to fund a special vacation for his family in 7 years. He wil deposit the money today into a savings account that will pay interest at a rate of 6.4% per year. His his goal is to have the equivalent to $44,000 in today's dollars in the acount 7 years from today. If the annual inflation rate over the next 7 years is 1.9%, how much money should he deposit into the account today? (Assume that the man will make no additional deposits or withdrawals into the account after today.) Amount to be deposited: $ OMark for Review What's This?
Transcribed Image Text:A man wishes to set aside some money to fund a special vacation for his family in 7 years. He wil deposit the money today into a savings account that will pay interest at a rate of 6.4% per year. His his goal is to have the equivalent to $44,000 in today's dollars in the acount 7 years from today. If the annual inflation rate over the next 7 years is 1.9%, how much money should he deposit into the account today? (Assume that the man will make no additional deposits or withdrawals into the account after today.) Amount to be deposited: $ OMark for Review What's This?
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