Suppose that the parents of a young child decide to make annual deposits into a savings account, with the first deposit being made on the child's fifth birthday and the last deposit being made on the 15th birthday. Then, starting on the child's 18th birthday, the withdrawals as shown on the diagram below will be made. If the effective annual interest rate is 10% during this period of time, what are the annual deposits in years 5 through 15? Use a uniform gradient amount (G) in your solution. A Click the icon to view the diagram for cash flows.

Suppose that the parents of a young child decide to make annual deposits into a savings account, with the first deposit being made on the child's fifth birthday and the last deposit being made on the 15th birthday. Then, starting on the child's 18th birthday, the withdrawals as shown on the diagram below will be made. If the effective annual interest rate is 10% during this period of time, what are the annual deposits in years 5 through 15? Use a uniform gradient amount (G) in your solution. A Click the icon to view the diagram for cash flows.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose that the parents of a young child decide to make annual deposits into a savings account, with the first deposit being made on the child's fifth birthday and
the last deposit being made on the 15th birthday. Then, starting on the child's 18th birthday, the withdrawals as shown on the diagram below will be made. If the
effective annual interest rate is 10% during this period of time, what are the annual deposits in years 5 through 15? Use a uniform gradient amount (G) in your
solution.
Click the icon to view the diagram for cash flows.
Click the icon to view the interest and annuity table for discrete compounding when i= 10% per year.

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Q 6 please
Suppose that a father, on the day his son is born, wishes to determine what lump amount would have to be paid into an account bearing interest of 17% per year to provide withdrawals of $4,000 on each of the son's 9th, 10th, 11th, and 12th birthdays. How much money does the father have to deposit on the day his son is born ? Please, represent the cash-flow diagram.
How much invested now at 8% would be just sufficient to provide three payments, with the first payment in the amount of $9,000 occurring two years hence, then $6,000 five years hence, and finally $3,000 seven years hence? Click the icon to view the interest factors for discrete compounding when i = 8% per year. The invested amount should be $ (Round to the nearest dollar.)
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Using the formula, not the table
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