What amount must be deposited today into an account offering a stated annual rate of 24% compounded annually, if, beginning one year from today, one wishes to make the following series of five growing annual withdrawals? End-of-Year Withdrawal $1,000∙(1.04)1 $1,000∙(1.04)2 $1,000∙(1.04)3 $1,000∙(1.04)4 $1,000∙(1.04)5 What would be the deposit amount if the series continued for 50 years (last withdrawal = $1,000∙(1.04)50)? What would be the deposit amount if the series continues forever?
What amount must be deposited today into an account offering a stated annual rate of 24% compounded annually, if, beginning one year from today, one wishes to make the following series of five growing annual withdrawals? End-of-Year Withdrawal $1,000∙(1.04)1 $1,000∙(1.04)2 $1,000∙(1.04)3 $1,000∙(1.04)4 $1,000∙(1.04)5 What would be the deposit amount if the series continued for 50 years (last withdrawal = $1,000∙(1.04)50)? What would be the deposit amount if the series continues forever?
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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- (Growing Series Problem)
- What amount must be deposited today into an account offering a stated annual rate of 24% compounded annually, if, beginning one year from today, one wishes to make the following series of five growing annual withdrawals?
End-of-Year Withdrawal
- $1,000∙(1.04)1
- $1,000∙(1.04)2
- $1,000∙(1.04)3
- $1,000∙(1.04)4
- $1,000∙(1.04)5
- What would be the deposit amount if the series continued for 50 years (last withdrawal = $1,000∙(1.04)50)?
- What would be the deposit amount if the series continues forever?
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