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You plan to retire 28 years later. Your account currently has $20,000 that you will leave aside for retirement. You will have the ability to invest money into this account four years later. What equal amount of money would you need to deposit in the same account at the end of every year for the next 28 years, starting from the 4th year, in order to accumulate $1 Million at the instant the 28th deposit is made? Assume the bank pays interest at the rate of 5% per year for the entire 28 years. Pick the choice closest to your answer. a. $15,778 b. $17,120 c. $20.708 $40,833

You plan to retire 28 years later. Your account currently has $20,000 that you will leave aside for retirement. You will have the ability to invest money into this account four years later. What equal amount of money would you need to deposit in the same account at the end of every year for the next 28 years, starting from the 4th year, in order to accumulate $1 Million at the instant the 28th deposit is made? Assume the bank pays interest at the rate of 5% per year for the entire 28 years. Pick the choice closest to your answer. a. $15,778 b. $17,120 c. $20.708 $40,833

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 retire 28 years later. Your account currently has $20,000 that you will leave aside for retirement. You will have the ability to invest money into this account four years later. What equal amount of money would you need to deposit in the same account at the end of every year for the next 28 years, starting from the 4th year, in order to accumulate $1 Million at the instant the 28th deposit is made? Assume the bank pays interest at the rate of 5% per year for the entire 28 years. Pick the choice closest to your answer. Ⓒa. $15,778 b. $17,120 c. $20.708 $40,833 d.
Transcribed Image Text:You plan to retire 28 years later. Your account currently has $20,000 that you will leave aside for retirement. You will have the ability to invest money into this account four years later. What equal amount of money would you need to deposit in the same account at the end of every year for the next 28 years, starting from the 4th year, in order to accumulate $1 Million at the instant the 28th deposit is made? Assume the bank pays interest at the rate of 5% per year for the entire 28 years. Pick the choice closest to your answer. Ⓒa. $15,778 b. $17,120 c. $20.708 $40,833 d.
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