Required Lump-Sum Payment To complete your last year in business school and then go through law school, you will need $30,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $30,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 8.5% interest a sum of money that is sufficient to provide the 4 payments of $30,000 each. His deposit will be made today. Do not round intermediate calculations. Round your answers to the nearest cent. If your answer is zero, enter "0". a. How large must the deposit be? $ b. How much will be in the account immediately after you make the first withdrawal? $ How much will be in the account immediately after you make the last withdrawal? $
Required Lump-Sum Payment To complete your last year in business school and then go through law school, you will need $30,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $30,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 8.5% interest a sum of money that is sufficient to provide the 4 payments of $30,000 each. His deposit will be made today. Do not round intermediate calculations. Round your answers to the nearest cent. If your answer is zero, enter "0". a. How large must the deposit be? $ b. How much will be in the account immediately after you make the first withdrawal? $ How much will be in the account immediately after you make the last withdrawal? $
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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Transcribed Image Text:Required Lump-Sum Payment
To complete your last year in business school and then go
through law school, you will need $30,000 per year for 4
years, starting next year (that is, you will need to withdraw the
first $30,000 one year from today). Your uncle offers to put
you through school, and he will deposit in a bank paying 8.5%
interest a sum of money that is sufficient to provide the 4
payments of $30,000 each. His deposit will be made today. Do
not round intermediate calculations. Round your answers to
the nearest cent. If your answer is zero, enter "0".
a. How large must the deposit be?
$
b. How much will be in the account immediately after you
make the first withdrawal?
How much will be in the account immediately after you
make the last withdrawal?
LA
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