Question
1. Derek currently has $14,222.00 in an account that pays 5.00%. He will withdraw $5,097.00 every other year beginning next year until he has taken
1. Derek currently has $14,222.00 in an account that pays 5.00%. He will withdraw $5,097.00 every other year beginning next year until he has taken 7.00 withdrawals. He will deposit $14222.0 every other year beginning two years from today until he has made 7.0 deposits. How much will be in the account 25.00 years from today?
2. Derek can deposit $248.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 15.00% and compounds interest monthly. Derek can deposit $2,456.00 per year for the next 10 years into an account at Bank B. The first deposit will be made next year. Bank B compounds interest annually. What rate must Bank B pay for Derek to have the same amount in both accounts after 10 years?
3. Assume the real rate of interest is 4.00% and the inflation rate is 5.00%. What is the value today of receiving 11,668.00 in 11.00 years?
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