Suppose Chris is saving to finance a 3-year trip around the world. He plans make 4 equal annual savings payments starting today after 4 years he will keep the money in the same account at 5.2% until he needs it. He anticipates needing $45,000 a year for each of the 3 years of his trip which he will withdraw at the beginning of each year. How much will he have to save each year if he leaves 7 years from today and the interest rate is 5.2%
Suppose Chris is saving to finance a 3-year trip around the world. He plans make 4 equal annual savings payments starting today after 4 years he will keep the money in the same account at 5.2% until he needs it. He anticipates needing $45,000 a year for each of the 3 years of his trip which he will withdraw at the beginning of each year. How much will he have to save each year if he leaves 7 years from today and the interest rate is 5.2%
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 Chris is saving to finance a 3-year trip around the world. He plans make 4 equal annual savings payments starting today after 4 years he will keep the money in the same account at 5.2% until he needs it. He anticipates needing $45,000 a year for each of the 3 years of his trip which he will withdraw at the beginning of each year. How much will he have to save each year if he leaves 7 years from today and the interest rate is 5.2%
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