Suppose an individual makes an initial investment of $2800 in an account that earns 7.8%. compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of each month for the next 5 years (so that the account balance will be reduced to s0). (a) How much is in the account after the last deposit is made? b) How much was deposited? (c) What is the amount of each withdrawal? (d) What is the total amount withdrawn?
Suppose an individual makes an initial investment of $2800 in an account that earns 7.8%. compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of each month for the next 5 years (so that the account balance will be reduced to s0). (a) How much is in the account after the last deposit is made? b) How much was deposited? (c) What is the amount of each withdrawal? (d) What is the total amount withdrawn?
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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Suppose an individual makes an initial investment of $2800 in an account that earns 7.8%. compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of each month for the next 5 years (so that the account balance will be reduced to s0). (a) How much is in the account after the last deposit is made? b) How much was deposited? (c) What is the amount of each withdrawal? (d) What is the total amount withdrawn?
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