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(iv) Continue with this logic and sum all the matured values expressed

(iv) Continue with this logic and sum all the matured values expressed

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
Problem 1PS
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Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years? Approach (i) The first $100 is contributed in one year's time and has to wait 4 years to "mature". Write an equation describing this. (ii) The second $100 is contributed in two year's time and has to wait 3 years to "mature". Write an equation describing this. (iii) The third $100 is contributed in three year's time and has to wait 2 years to "mature". Write an equation describing this. (iv) Continue with this logic and sum all the matured values expressed
Transcribed Image Text:Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years? Approach (i) The first $100 is contributed in one year's time and has to wait 4 years to "mature". Write an equation describing this. (ii) The second $100 is contributed in two year's time and has to wait 3 years to "mature". Write an equation describing this. (iii) The third $100 is contributed in three year's time and has to wait 2 years to "mature". Write an equation describing this. (iv) Continue with this logic and sum all the matured values expressed
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