There are plans for Nestle company to expand and add a new product to the market available in 6 years. Nestle CFO Ruben Estrada wants to have $500,000 available before he announces the product. If the CFO sets aside $75,000 now and $100,000 in year 2, what uniform annual amount will it have to put in an account in years 3 through 6 to have the $500,000? Assume the account earns interest at 10% per year.

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
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There are plans for Nestle company to expand and add a new product to the market available in 6
years. Nestle CFO Ruben Estrada wants to have $500,000 available before he announces the
product. If the CFO sets aside $75,000 now and $100,000 in year 2, what uniform annual amount
will it have to put in an account in years 3 through 6 to have the $500,000? Assume the account
earns interest at 10% per year.
Transcribed Image Text:There are plans for Nestle company to expand and add a new product to the market available in 6 years. Nestle CFO Ruben Estrada wants to have $500,000 available before he announces the product. If the CFO sets aside $75,000 now and $100,000 in year 2, what uniform annual amount will it have to put in an account in years 3 through 6 to have the $500,000? Assume the account earns interest at 10% per year.
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