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You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F=? F=? 120 120 240 240 i= 0.5% i= 6% A= 100 A= 100 Option C Option D F=? F%3D? 10 10 20 20

You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F=? F=? 120 120 240 240 i= 0.5% i= 6% A= 100 A= 100 Option C Option D F=? F%3D? 10 10 20 20

Essentials Of Investments
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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You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly? Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F=? F=? 120 1 120 240 240 i = 0.5% i= 6% A = 100 A = 100 Option C Option D F=? F=? 10 10 20 20 i= 0.5% i = 6% A = 100 A = 100 Question 4 Part B: Identify the correct Function Notation for this scenario. F = 100(P/A,0.5%,10)(P/F, 0.5%, 10) O F = 100(F/A,6%,120)(P/F, 6%, 120) O F = 100(F/A,0.5%,120)(F/P, 0.5%, 120) F = 100(F/A,6%,10)(F/P, 6%, 10) Question 4 Part C: Provide the final value for withdrawal at the end of year 20. Enter your answer in the form: 12345.67 Question 4 Part D: Choose the statement that is most correct for your answer to Part C. O The amount found in part C will be available to withdraw at the end of year 20. O The amount found in part C will be available to withdraw at the end of each month if the account pays a nominal annual rate of 6% compounded monthly. O The amount found in part C will be available to withdraw if the account pays a nominal annual rate of 6% compounded monthly. O The amount found in part C will be available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly.
Transcribed Image Text:You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly? Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F=? F=? 120 1 120 240 240 i = 0.5% i= 6% A = 100 A = 100 Option C Option D F=? F=? 10 10 20 20 i= 0.5% i = 6% A = 100 A = 100 Question 4 Part B: Identify the correct Function Notation for this scenario. F = 100(P/A,0.5%,10)(P/F, 0.5%, 10) O F = 100(F/A,6%,120)(P/F, 6%, 120) O F = 100(F/A,0.5%,120)(F/P, 0.5%, 120) F = 100(F/A,6%,10)(F/P, 6%, 10) Question 4 Part C: Provide the final value for withdrawal at the end of year 20. Enter your answer in the form: 12345.67 Question 4 Part D: Choose the statement that is most correct for your answer to Part C. O The amount found in part C will be available to withdraw at the end of year 20. O The amount found in part C will be available to withdraw at the end of each month if the account pays a nominal annual rate of 6% compounded monthly. O The amount found in part C will be available to withdraw if the account pays a nominal annual rate of 6% compounded monthly. O The amount found in part C will be available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly.
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