To find the balance in the account at the end of the calendar year, we calculate the effective interest rate, 6%/4 = 1.5% per quarter. Then, lumping the amounts at the effective dates. F = ($4000- $175)(F[P, 1.5%, 4)+ (S1200- $1800)(F/P, 1.5%, 3) + ($180- $800)(F/P, 1.5%, 2) + ($1600 - $1100)(F/P, 1.5%, 1) + $2300 = $3825(1.0614) -$600(1.0457)- $620(1.0302)+ $500(1.0150)+ $2300 %3D $5601.21
To find the balance in the account at the end of the calendar year, we calculate the effective interest rate, 6%/4 = 1.5% per quarter. Then, lumping the amounts at the effective dates. F = ($4000- $175)(F[P, 1.5%, 4)+ (S1200- $1800)(F/P, 1.5%, 3) + ($180- $800)(F/P, 1.5%, 2) + ($1600 - $1100)(F/P, 1.5%, 1) + $2300 = $3825(1.0614) -$600(1.0457)- $620(1.0302)+ $500(1.0150)+ $2300 %3D $5601.21
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
fee cash flow diagram
![Example [11]
To find the balance in the account at the end of the calendar year, we calculate
the effective interest rate, 6%/4 = 1.5% per quarter. Then, lumping the amounts
at the effective dates.
F = ($4000- $175)(F/P, 1.5%, 4) + ($1200 - $1800)(F[P, 1.5%, 3)
+ ($180- $800)(F/P, 1.5%, 2) + ($1600 - $1100)(F/P, 1.5%, 1)+ $2300
= $3825(1.0614)-$600(1.0457)-$620(1.0302) + $500(1.0150)+ $2300
%3D
= $5601.21
%3D](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa0257e5e-868b-4aca-bf76-4e66edfd389a%2F88c46b9c-7c12-4062-a58a-9c5a4ed9be93%2Fxutuq6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Example [11]
To find the balance in the account at the end of the calendar year, we calculate
the effective interest rate, 6%/4 = 1.5% per quarter. Then, lumping the amounts
at the effective dates.
F = ($4000- $175)(F/P, 1.5%, 4) + ($1200 - $1800)(F[P, 1.5%, 3)
+ ($180- $800)(F/P, 1.5%, 2) + ($1600 - $1100)(F/P, 1.5%, 1)+ $2300
= $3825(1.0614)-$600(1.0457)-$620(1.0302) + $500(1.0150)+ $2300
%3D
= $5601.21
%3D
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