Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Assume an account has an APR of 5% with semiannual compounding. You plan on making quarterly deposits of $5,000 in this security starting 1

1. Assume an account has an APR of 5% with semiannual compounding. You plan on making quarterly deposits of $5,000 in this security starting 1 year from today and going until 4 years and 6 months from today. Each deposit shrinks by 3%. After this, starting 4 years 10 months from now, you begin making monthly withdrawals of $200 until your final withdrawal 5 years 3 months from now. What will you have in your account by year 6?

3. You currently have $200,000 in an account earning 7% APR compounded annually. You plan on making quarterly withdrawals starting 1 year and 7 months from today and ending 6 years and 4 months from today. Each withdrawal grows by 1%. If you plan on having nothing left on your last withdrawal, what does your fourth withdrawal need to be?

2. You decide to put money into a savings account that returns 5.5% APR compounded semi-annually. Starting 1 year 4 months from today, you begin making quarterly withdrawals with your first withdrawal being $7,500 and each withdrawal grows by 3%. Your last withdrawal is 4 years and 1 month from today. What is the value you must deposit today to make these withdrawals?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Beginner Day Trader Market Timing Bible

Authors: Joe Valuta

1st Edition

1542456142, 978-1542456142

More Books

Students also viewed these Finance questions