An individual makes six annual deposits in a savings account starting one year from now that pays interest at a rate of 10% compounded annually and after the last deposit the interest rate changed to 12% per year compounded annually. Ten years after his last deposit he made a withdrawal $7,000 per year for 8 years from his account. How much would be the six annual deposits?

An individual makes six annual deposits in a savings account starting one year from now that pays interest at a rate of 10% compounded annually and after the last deposit the interest rate changed to 12% per year compounded annually. Ten years after his last deposit he made a withdrawal $7,000 per year for 8 years from his account. How much would be the six annual deposits?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

5. Draw cashflow diagram and show all solution. not in excel please

An individual makes six annual deposits in a savings account starting one year from now that pays interest at a rate of
10% compounded annually and after the last deposit the interest rate changed to 12% per year compounded annually.
Ten years after his last deposit he made a withdrawal $7,000 per year for 8 years from his account. How much would be
the six annual deposits?

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