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Today Sarah deposits $15,000 into an account that pays 12% per year compounded annually. If after one year, she withdraws $500. After another year, she withdraws another $500. Starting the following year, each withdrawal is 10% more than the previous year (So, in year 3 she withdraws $550). If the final withdrawal takes place 7 years from now. How much will Sarah have left in the account right after her last withdrawal? (PLOT the cash flow diagram before solving)

Today Sarah deposits $15,000 into an account that pays 12% per year compounded annually. If after one year, she withdraws $500. After another year, she withdraws another $500. Starting the following year, each withdrawal is 10% more than the previous year (So, in year 3 she withdraws $550). If the final withdrawal takes place 7 years from now. How much will Sarah have left in the account right after her last withdrawal? (PLOT the cash flow diagram before solving)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Today Sarah deposits $15,000 into an account that pays 12% per year compounded annually. If after one year, she withdraws $500. After another year, she withdraws another $500. Starting the following year, each withdrawal is 10% more than the previous year (So, in year 3 she withdraws $550). If the final withdrawal takes place 7 years from now. How much will Sarah have left in the account right after her last withdrawal? (PLOT the cash flow diagram before solving)
Transcribed Image Text:Today Sarah deposits $15,000 into an account that pays 12% per year compounded annually. If after one year, she withdraws $500. After another year, she withdraws another $500. Starting the following year, each withdrawal is 10% more than the previous year (So, in year 3 she withdraws $550). If the final withdrawal takes place 7 years from now. How much will Sarah have left in the account right after her last withdrawal? (PLOT the cash flow diagram before solving)
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