Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If you deposit $10,000 recieved at the end of 5 years in the bank what will the amount grow to by the end of year

If you deposit $10,000 recieved at the end of 5 years in the bank what will the amount grow to by the end of year 14?
image text in transcribed
(Comprehensive problem) You would like to have $59,000 in 14 years. To accumulate this amount, you plan to deposit an equal sum in the bank each year that will eam 8 percent interest compounded annually. Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 8 percent on this deposit.) C. At the end of five years, you will receive $10,000 and deposit this in the bank toward your goal of $59,000 at the end of year 14. In addition to the lump-sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Again, assume you can earn 8 percent on your deposits.) a. How much must you deposit annually to accumulate this amount? - $ 2436.51 (Round to the nearest cent.) b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should the lump-sum deposit be? $ 20087 20 (Round to the nearest cent) c. If you deposit $10,000 received at the end of five years in the bank, what will the amount grow to by the end of year 14? S 1829.73 (Round to the nearest cent.)

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_2

Step: 3

blur-text-image_3

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

Real Estate Post Pandemic And Digital Real Estate

Authors: Fred Nickerson

1st Edition

979-8834591344

More Books

Students also viewed these Finance questions