An aunty deposits $10,000 into an account earning 2% p.a. pounded quarterly. She wants a total of 20 regular quarterly pay- ments to be made out of the account and into her niece's account at the beginning of each quarter. com- (a) If the first payment is made now then what is the value of the regular payment? Give your answer rounded to the nearest cent. (b) If the first payment is made in two year's time then what is the value of the regular payment? Give your answer rounded to the nearest cent. (c) How many quarters should the payments be deferred to achieve a regular payment of $550 per quarter? Round your answer up to nearest whole quarter.
An aunty deposits $10,000 into an account earning 2% p.a. pounded quarterly. She wants a total of 20 regular quarterly pay- ments to be made out of the account and into her niece's account at the beginning of each quarter. com- (a) If the first payment is made now then what is the value of the regular payment? Give your answer rounded to the nearest cent. (b) If the first payment is made in two year's time then what is the value of the regular payment? Give your answer rounded to the nearest cent. (c) How many quarters should the payments be deferred to achieve a regular payment of $550 per quarter? Round your answer up to nearest whole quarter.
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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Transcribed Image Text:An aunty deposits $10,000 into an account earning 2% p.a.
pounded quarterly. She wants a total of 20 regular quarterly pay-
ments to be made out of the account and into her niece's account at
the beginning of each quarter.
com-
(a) If the first payment is made now then what is the value of the
regular payment? Give your answer rounded to the nearest cent.
(b) If the first payment is made in two year's time then what is the
value of the regular payment? Give your answer rounded to the
nearest cent.
(c) How many quarters should the payments be deferred to achieve
a regular payment of $550 per quarter? Round your answer up
to nearest whole quarter.
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