Marla would like to collect $195,000 to buy a house in 12 years. She thinks she can save money in a money-market account earning 5% interest per year. She would like to deposit an amount Q today to open the account,make a deposit every year, and make the last deposit at the end of Year 12 into the account. She also believes thatshe can increase the value of the deposit that she makes into the account every year by 3% above what shedeposited the previous year, starting with the amount Q. What is the value of Q with which she will have to openthe account to make this happen?• $9,350O $9,293O $5,130O $6.677

A B C D Yearly Deposit P n(years of CI) (1+r/100)^n A*C 9350.000 12 1.795856326 16791.25665…

Answered: Marla would like to collect $195,000 to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Compound interest is a very powerful way to save for your retirement. Saving a little and giving it time to grow is often more effective than saving a lot over a short period of time. To illustrate this, suppose your goal is to save $1 million by the age of 70. What amount of money will be saved by socking away $3,038 per year starting at age 23 with a 7% annual interest rate. Will you achieve your goal using the long-term savings plan? What amount of money will be saved by socking away $20,406 per year starting at age 48 at the same interest rate? Will you achieve your goal using the short-term savings plan? Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year. C The future equivalent of the long-term savings plan is $ 1,000,184. (Round to the nearest dollar.) You will achieve your goal using the long-term savings plan. The future equivalent of the short-term savings plan is $. (Round to the nearest dollar.)
If you had $1,000 now and invested it at 6%, how much would it be worth 12 years from now?
Find the present value of 10% interest of the series of payment starting at year 1 of $100 and decrease by $10 each year after until the end of year 4.
What single amount at the end of the sixth yearis equivalent to a uniform annual series of $7,500per year for 12 years if the interest rate is 10% compounded annually?
A) How much must be deposited today into an account earning 4% interest annually to support an annual withdrawal of $1,970 a year in perpetuity? B) What if the first withdrawal starts at the end of year 6?
Lindsey plans to deposit her annual bonus into a savings account that pays 3% interest compounded annually. The size of her bonus increases by $1000 each year, and the initial bonus amount she will deposit at the end of year 1 is $2,500. a) Determine how much will be in the account immediately after the 6th deposit. b) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8)? c) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8), but also plans to skip the deposits at the end of years 3 and 6?
Shalika puts $650 into a savings account that pays 3.2% interest per year, compounded annually. What is the amount of money that she will have after 10 years?
Answer in 30 minutes please
Calculate the future value (F) for the cash flows at the end of each year over a four-year period, using the interest rates indicated in the provided figure. 10% Compounded quarterly 6% Compounded monthly 0 $450 1 2 $150 F=? 3 Year $450
Accumulate P16,500 for 2 years and 10 months at (a) 13% compounded monthly, and (b) 13% compounded continuously.
If the nominal annual interest rate is 5% compounded monthly, what is the effective interest rate?
Suppose that $5000 is deposited in a saving account at the rate of 6% per year. Find the total amount on deposit at the end of 4 years if the interest is: compounded continuously?

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