On the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year, and the remaining balance at the end of the third year. a. How much does he withdraw at the end of the third year? b. What is the net cash flow? c.How much better off, in terms of net cash flow, would he have been if he had not made the withdrawals at the ends of years one and two?
On the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year, and the remaining balance at the end of the third year. a. How much does he withdraw at the end of the third year? b. What is the net cash flow? c.How much better off, in terms of net cash flow, would he have been if he had not made the withdrawals at the ends of years one and two?
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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On the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year, and the remaining balance at the end of the third year.
a. How much does he withdraw at the end of the third year?
b. What is the net cash flow?
c.How much better off, in terms of net cash flow, would he have been if he had not made the withdrawals at the ends of years one and two?
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