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Macon would like to begin planning for retirement. He has as of his 60th birthday collected $200,000 which he plans to deposit in a bank account earning 8% per year compounded yearly. Macon is also willing to begin saving an amount on his 61st birthday, and increase that amount by 5% every year. He would like to avail $74,000 on his 70th birthday and keep getting an amount greater than that by 15% every year till his 75th birthday. How much money should he deposited on his 61st birthday?

Macon would like to begin planning for retirement. He has as of his 60th birthday collected $200,000 which he plans to deposit in a bank account earning 8% per year compounded yearly. Macon is also willing to begin saving an amount on his 61st birthday, and increase that amount by 5% every year. He would like to avail $74,000 on his 70th birthday and keep getting an amount greater than that by 15% every year till his 75th birthday. How much money should he deposited on his 61st birthday?

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
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Question 2 Macon would like to begin planning for retirement. He has as of his 60th birthday collected $200,000 which he plans to deposit in a bank account earning 8% per year compounded yearly. Macon is also willing to begin saving an amount on his 61st birthday, and increase that amount by 5% every year. He would like to avail $74,000 on his 70th birthday and keep getting an amount greater than that by 15% every year till his 75th birthday. How much money should he deposited on his 61st birthday? $3,645 2 $3,951 3 $5,627 4 $5,842
Transcribed Image Text:Question 2 Macon would like to begin planning for retirement. He has as of his 60th birthday collected $200,000 which he plans to deposit in a bank account earning 8% per year compounded yearly. Macon is also willing to begin saving an amount on his 61st birthday, and increase that amount by 5% every year. He would like to avail $74,000 on his 70th birthday and keep getting an amount greater than that by 15% every year till his 75th birthday. How much money should he deposited on his 61st birthday? $3,645 2 $3,951 3 $5,627 4 $5,842
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