Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EB: You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how...
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Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years?
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(i) The first $100 is contributed in one year’s time and has to wait 4 years to “mature”. Write an equation describing this.
(ii) The second $100 is contributed in two year’s time and has to wait 3 years to “mature”. Write an equation describing this.

 

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