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Into a savings account, you will be investing $11000 today, $6000 in one year, $12000 two years from today, and $7000 at t =5 years.
Into a savings account, you will be investing $11000 today, $6000 in one year, $12000 two years from today, and $7000 at t =5 years. The expected rate of return on this account is 2%/year, and you plan to withdraw the entire balance from this investment in exactly 11 years. What will your investments be worth (in other words, how much can you withdraw) 11 years from today? [To draw a timeline can very much help to organize your work and, in turn, recognize the right number of times to compound each of the four cash flows.]
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