Mr. Smith has saved RM1 800 each year for 20 years in Unit trust account. A year after the saving period ended, Mr. Smith withdrew RM7 500 each year for a period of 5 years. In the sixth and seventh years, he only withdrew RMS 000 per year. In the eighth year, he decided per year throughout the whole period. Q1 withdraw the remaining money in his account. The interest rate was 6% (a) Draw the cash flow diagram SK SK 7.5K 7.5K 7.5K 7.5K 7.5K 3 4 23 7. 26 27 20 21 22 24 25 28 1.8K 1.8K 1.8K (b) Determine the remaining amount of money that he can withdraw at the end of the eighth year

Mr. Smith has saved RM1 800 each year for 20 years in Unit trust account. A year after the saving period ended, Mr. Smith withdrew RM7 500 each year for a period of 5 years. In the sixth and seventh years, he only withdrew RMS 000 per year. In the eighth year, he decided per year throughout the whole period. Q1 withdraw the remaining money in his account. The interest rate was 6% (a) Draw the cash flow diagram SK SK 7.5K 7.5K 7.5K 7.5K 7.5K 3 4 23 7. 26 27 20 21 22 24 25 28 1.8K 1.8K 1.8K (b) Determine the remaining amount of money that he can withdraw at the end of the eighth year

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

Mr. Smith has saved RM1 800 each year for 20 years in Unit trust account. A year after
the saving period ended, Mr. Smith withdrew RM7 500 each year for a period of 5 years.
In the sixth and seventh years, he only withdrew RM5 000 per year. In the eighth year,
he decided to withdraw the remaining money in his account. The interest rate was 6%
per year throughout the whole period.
Q1
(a) Draw the cash flow diagram
SK 5K
7.5K 7.5K 7 SK 7.5K
7.5K
4
6
26
27
20 21
22
23
24
25
28
1.8K 1.8K iSK
(b)
Determine the remaining amount of money that he can withdraw at the end of the
eighth year
1800 E, 6%, 20) (,6%,8) = 7500 (.6%, 5) (F. 6%.,3) + 5x (.6%, 2) +
5K (E, 6%, 1) + X

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