Question
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started