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1. Suppose that you are planning to take a six month trip. You have carefully prepared a budget and determined that you will need $2000

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1. Suppose that you are planning to take a six month trip. You have carefully prepared a budget and determined that you will need $2000 per month. In this problem, you will work out how much money you will need in your savings account at the beginning of the trip to be able to take out $2000 at the beginning of each month. (You will not have any earnings except interest on the account, and you will make no other deposits or withdrawals.) Assume your account has an annual interest rate of 1.75%, compounded continu- ously. Assume the beginning of your trip is t 0, with time measured in months. For each question below, write your answer in both calculator-ready form (you can (a) How much money should be in your account at the beginning of the trip to make You will make a total of six withdrawals, at t-0,1., ., and t 5. label this CRF if you want), AND as a decimal approximation with units the first withdrawal, at time t 0? (b) How much money should be in your account at the beginning of the trip to make the second withdrawal, at time t = 1? (Just the second withdrawal, not the total of the first two.) (c) How much money should be in your account at the beginning of the trip to make the third withdrawal, at timet2? (Just the third withdrawal, not the total of the first three.)

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