J. Doe is turning 40 years old today and plans to retire in his 65th birthday. He starts making quarterly deposits (starting on the day of his 40hbirthday)into an aсcount that pays 6% comриnded monthly. Не plans to withdraw $25000 aппually from the account beginning on his 65th birthday until his 75th birthday. (Note that the last deposit is made at the same time that the first withdrawal) What is the effective interest rate? (a) 6.17% (b) 6.00% (c) 0.50% (d)1.51% What is the amount of the deposit? Use PW =210000 at J.Doe's 65h birthday. (a) $896 (b) $914 (c) $937 (d) $975
J. Doe is turning 40 years old today and plans to retire in his 65th birthday. He starts making quarterly deposits (starting on the day of his 40hbirthday)into an aсcount that pays 6% comриnded monthly. Не plans to withdraw $25000 aппually from the account beginning on his 65th birthday until his 75th birthday. (Note that the last deposit is made at the same time that the first withdrawal) What is the effective interest rate? (a) 6.17% (b) 6.00% (c) 0.50% (d)1.51% What is the amount of the deposit? Use PW =210000 at J.Doe's 65h birthday. (a) $896 (b) $914 (c) $937 (d) $975
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please write all your steps regarding each calculation. Also, refer to the formula sheet; if any formula is used, please label it. Thankyou.
![List of Equations:
M
i̟
1+
M
i=|1+
СК
-1
i-
-1
(1+i)* –1
N
i
-
(A/F, i, N) =
(F/A, i, N) =
(1+i)* – 1
(1+i)* – 1
i(1+i)*
i(1+i)*
(P/A, i, N) :
(A/P, i,N) =
_(1+i)" – 1
-
(1 +i)™ – iN – 1
(1+i)" – iN –1
-
-
-
(P/G,i, N):
(A/G,i, N) =
%3D
N
(1+i)
i[(1 +i)^ – 1]
1-(1+ g) (1+ i)*
N
(P/A,g, i, N)=
if itg
i -g
N
(P/A,g i, N)=
(1+i)
if i=g
А
PW — СЕ
CR(i) — (Р — S)(А/Р, і, N) + iS
Bn = A(P/A,i,N-n)
In = (Bn-1)*i= A(P/A,i,N-n+1)*i
PPn = A(P/F,i,N-n+1)
P-S
Ds/(n) =
Р-S
BVs/(n)=P – n
N
BV 45(n) = P(1–d)"
Da, (n) = dP(1– d)
n-1
for n>1
CA, = rd{1-4)a-
CCA1 = P(d/2)
ССА
(1-d)"-2
for n>2
G=t * (Udisposal – S)
G=t-(Udisposal – P) – tcG+(S – P)
-
d
i'= i- f)
(1+f)
i =i' +f+i'*f
n-1
U
n
2
MARRA = MARRR +f+ MARRR f
*](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F783ce383-43f3-4332-85c6-260e48a9a7aa%2Fd2cd28a4-6f4a-473a-ba4b-4fd8330b48bc%2Fznsxizh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:List of Equations:
M
i̟
1+
M
i=|1+
СК
-1
i-
-1
(1+i)* –1
N
i
-
(A/F, i, N) =
(F/A, i, N) =
(1+i)* – 1
(1+i)* – 1
i(1+i)*
i(1+i)*
(P/A, i, N) :
(A/P, i,N) =
_(1+i)" – 1
-
(1 +i)™ – iN – 1
(1+i)" – iN –1
-
-
-
(P/G,i, N):
(A/G,i, N) =
%3D
N
(1+i)
i[(1 +i)^ – 1]
1-(1+ g) (1+ i)*
N
(P/A,g, i, N)=
if itg
i -g
N
(P/A,g i, N)=
(1+i)
if i=g
А
PW — СЕ
CR(i) — (Р — S)(А/Р, і, N) + iS
Bn = A(P/A,i,N-n)
In = (Bn-1)*i= A(P/A,i,N-n+1)*i
PPn = A(P/F,i,N-n+1)
P-S
Ds/(n) =
Р-S
BVs/(n)=P – n
N
BV 45(n) = P(1–d)"
Da, (n) = dP(1– d)
n-1
for n>1
CA, = rd{1-4)a-
CCA1 = P(d/2)
ССА
(1-d)"-2
for n>2
G=t * (Udisposal – S)
G=t-(Udisposal – P) – tcG+(S – P)
-
d
i'= i- f)
(1+f)
i =i' +f+i'*f
n-1
U
n
2
MARRA = MARRR +f+ MARRR f
*
Transcribed Image Text:J. Doe is turning 40 years old today and plans to retire in his 65th birthday.
He starts making quarterly deposits (starting on the day of his 40birthday) into
an account that pays 6% comриnded monthly. Hе plans to withdraw $25000 аппиally
from the account beginning on his 65h birthday until his 75th birthday.
(Note that the last deposit is made at the same time that the first withdrawal)
What is the effective interest rate?
(a) 6.17%
(b) 6.00%
(c) 0.50%
(d)1.51%
What is the amount of the deposit? Use PW=210000 at J.Doe's 65th birthday.
(a) $896
(b) $914
(c) $937
(d) $975
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