The trustees of a college have accepted a gift of $100000, but are required to deposit it in an account paying 8% per year, compounded semiannually. They may make equal withdrawals at the end of each six-month period, but the money must last 4 years. a. Find the amount of each withdrawal. b. Find the amount of each withdrawal if the money must last 7 years.
The trustees of a college have accepted a gift of $100000, but are required to deposit it in an account paying 8% per year, compounded semiannually. They may make equal withdrawals at the end of each six-month period, but the money must last 4 years. a. Find the amount of each withdrawal. b. Find the amount of each withdrawal if the money must last 7 years.
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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The trustees of a college have accepted a gift of
$100000,
but are required to deposit it in an account paying
8%
per year, compounded semiannually. They may make equal withdrawals at the end of each six-month period, but the money must last
4
years.a. Find the amount of each withdrawal.
b. Find the amount of each withdrawal if the money must last
7
years.Expert Solution
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