Question
e. Assume a rich relative has just promised to give you money once a year. The first payment will occur 3 years and 6 months
e. Assume a rich relative has just promised to give you money once a year. The first payment will occur 3 years and 6 months from today and your final payment will occur 6 years and 6 months from today. Each payment will equal $1600. If the interest rate is 8.9% per year, what amount of money today would be equivalent to this gift you have received?
f. You decide to put money into a savings account that returns 2% per year. Starting 2 years and 8 months from today, you begin making withdrawals with your first withdrawal being $3000 per year and each withdrawal grows by 7%. Your last withdrawal is 9 years and 8 months from today. What is the value you must deposit today to make these withdrawals? g. Assume your mother has just promised to give you money once a year. The first payment will occur 1 years and 4 months from today and your final payment will occur 6 years and 4 months from today. The first payment will equal $1400, and the payments will grow by 2% each. If the interest rate is 7% per year, what will the value of the account be worth 7 years from today?
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