Question An investment of 700 is to be used to make payments of 10 at the end of the first year, 20 at the end of the second year, 30 at the end of the third year, and so on, every year for as long as possible. A smaller final payment is paid one year after the last regular payment. The fund earns an effective rate of interest of 5%. To the nearest dollar, the amount of the smaller final payment is equal to: Possible Answers A 35 B 67 10 C 70 10 D 74 E [I] 146
Question An investment of 700 is to be used to make payments of 10 at the end of the first year, 20 at the end of the second year, 30 at the end of the third year, and so on, every year for as long as possible. A smaller final payment is paid one year after the last regular payment. The fund earns an effective rate of interest of 5%. To the nearest dollar, the amount of the smaller final payment is equal to: Possible Answers A 35 B 67 10 C 70 10 D 74 E [I] 146
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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![Question
An investment of 700 is to be used to make payments of 10 at the end of the first year, 20
at the end of the second year, 30 at the end of the third year, and so on, every year for as
long as possible.
A smaller final payment is paid one year after the last regular payment.
The fund earns an effective rate of interest of 5%.
To the nearest dollar, the amount of the smaller final payment is equal to:
Possible Answers
A
35
B
67
10
C
70
10
D
74
E
[I]
146](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd9c830ab-8782-4e38-b709-675cb890d46a%2F1736a5f5-d02a-47e3-a2db-7ffe78a528ef%2F3hffozzh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question
An investment of 700 is to be used to make payments of 10 at the end of the first year, 20
at the end of the second year, 30 at the end of the third year, and so on, every year for as
long as possible.
A smaller final payment is paid one year after the last regular payment.
The fund earns an effective rate of interest of 5%.
To the nearest dollar, the amount of the smaller final payment is equal to:
Possible Answers
A
35
B
67
10
C
70
10
D
74
E
[I]
146
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