An account is set for Brenda that pays annually $50,000 which is adjusted for inflation every year. A one time initial deposit is needed at the start of year 1990 and the pay comes at the end of each year. The last payment would b in 1999 making a total of 10 payments. If the expected inflation for the next 9 years is 3.5% and the interest rate on the investments are 12%, what would be the amount of money paid for the one time first deposit? Please show every step of work thank you.
An account is set for Brenda that pays annually $50,000 which is adjusted for inflation every year. A one time initial deposit is needed at the start of year 1990 and the pay comes at the end of each year. The last payment would b in 1999 making a total of 10 payments. If the expected inflation for the next 9 years is 3.5% and the interest rate on the investments are 12%, what would be the amount of money paid for the one time first deposit? Please show every step of work thank you.
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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An account is set for Brenda that pays annually $50,000 which is adjusted for inflation every year. A one time initial deposit is needed at the start of year 1990 and the pay comes at the end of each year. The last payment would b in 1999 making a total of 10 payments. If the expected inflation for the next 9 years is 3.5% and the interest rate on the investments are 12%, what would be the amount of money paid for the one time first deposit?
Please show every step of work thank you.
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