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You currently have $20,000 in the bank. The monthly interest rate is 0.5%. What equal amount could be withdrawn each month for sixty months and have $0 left in the account at that time? The first withdrawal takes place one month from today.

You currently have $20,000 in the bank. The monthly interest rate is 0.5%. What equal amount could be withdrawn each month for sixty months and have $0 left in the account at that time? The first withdrawal takes place one month from today.

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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please solve with full detail so I can understand, Engineering Econ

## Table C-2: Discrete Compounding; i = 1/2% This table provides various factors used in financial calculations involving discrete compounding at an interest rate of 0.5% per period. It is divided into three main sections: Single Payment, Uniform Series, and Uniform Gradient. Each section contains specific factors used to find future or present values given periodic payments or gradients. ### Single Payment - **Compound Amount Factor (F/P):** Used to find the future value F given a present value P. - **Present Worth Factor (P/F):** Used to find the present value P given a future value F. ### Uniform Series - **Compound Amount Factor (F/A):** Used to find the future value F given an annuity payment A. - **Present Worth Factor (P/A):** Used to find the present value P given an annuity payment A. - **Sinking Fund Factor (A/F):** Used to find the annuity payment A needed to accumulate a future value F. - **Capital Recovery Factor (A/P):** Used to find the annuity payment A for recovering a present value P. ### Uniform Gradient - **Gradient Present Worth Factor (P/G):** Used to find the present value P of a series of cash flows with a uniform gradient G. - **Gradient Uniform Series Factor (A/G):** Used to find the annuity payment A equivalent to a series of cash flows with a uniform gradient G. The table lists values for each factor based on the number of periods, \(N\), ranging from 1 to 100. Here is a brief overview of the first three rows: | \(N\) | \(F/P\) | \(P/F\) | \(F/A\) | \(P/A\) | \(A/F\) | \(A/P\) | \(P/G\) | \(A/G\) | |------|--------|--------|--------|--------|--------|--------|--------|--------| | 1 | 1.0050 | 0.9950 | 1.0000 | 0.9950 | 1.0000 | 1.0050 | 0.0000 | 0.0000 | | 2 | 1.0100 | 0.9901 | 2.0050 | 1.9851 | 0.4988
Transcribed Image Text:## Table C-2: Discrete Compounding; i = 1/2% This table provides various factors used in financial calculations involving discrete compounding at an interest rate of 0.5% per period. It is divided into three main sections: Single Payment, Uniform Series, and Uniform Gradient. Each section contains specific factors used to find future or present values given periodic payments or gradients. ### Single Payment - **Compound Amount Factor (F/P):** Used to find the future value F given a present value P. - **Present Worth Factor (P/F):** Used to find the present value P given a future value F. ### Uniform Series - **Compound Amount Factor (F/A):** Used to find the future value F given an annuity payment A. - **Present Worth Factor (P/A):** Used to find the present value P given an annuity payment A. - **Sinking Fund Factor (A/F):** Used to find the annuity payment A needed to accumulate a future value F. - **Capital Recovery Factor (A/P):** Used to find the annuity payment A for recovering a present value P. ### Uniform Gradient - **Gradient Present Worth Factor (P/G):** Used to find the present value P of a series of cash flows with a uniform gradient G. - **Gradient Uniform Series Factor (A/G):** Used to find the annuity payment A equivalent to a series of cash flows with a uniform gradient G. The table lists values for each factor based on the number of periods, \(N\), ranging from 1 to 100. Here is a brief overview of the first three rows: | \(N\) | \(F/P\) | \(P/F\) | \(F/A\) | \(P/A\) | \(A/F\) | \(A/P\) | \(P/G\) | \(A/G\) | |------|--------|--------|--------|--------|--------|--------|--------|--------| | 1 | 1.0050 | 0.9950 | 1.0000 | 0.9950 | 1.0000 | 1.0050 | 0.0000 | 0.0000 | | 2 | 1.0100 | 0.9901 | 2.0050 | 1.9851 | 0.4988
You currently have $20,000 in the bank. The monthly interest rate is 0.5%. What equal amount could be withdrawn each month for sixty months and have $0 left in the account at that time? The first withdrawal takes place one month from today.
Transcribed Image Text:You currently have $20,000 in the bank. The monthly interest rate is 0.5%. What equal amount could be withdrawn each month for sixty months and have $0 left in the account at that time? The first withdrawal takes place one month from today.
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