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One person starts a formal investment club by establishing a stock mutual fund managed by the club and invests $2000 at the end of Year
One person starts a formal investment club by establishing a stock mutual fund managed by the club and invests $2000 at the end of Year 1 in the fund. Each year thereafter for nine years, one new member is added to the club. Each member invests $2000 each year in the mutual fund in the name of the club, thereby creating an arithmetic gradient series of deposits. At the end of Year 10, the club stops contributing and instead starts to withdraw the same amount of money (A) each year, beginning at the end of Year 11, and the fund will be exhausted at the end of Year 20. The fund compounds at a 12% annual rate. Question 1 Have F1 represent the money that the club will have in the account at the end of year 10. In order to compute F1, which of the following formula(s) are needed (select all that apply)? (a) F = A*(F/A, i, n) (b) F = P*(F/P, i, n) OC) A = F*(A/F, i, n) X #2(Alt + (d) P = G*(P/G, i, n) (e) P = A*(P/A, i, n) X Question 2 Compute the value of F1. (Round your answer to 2 decimal places.) number (rtol=0.01, atol=0.01) X 0% Question 3 Assume that the money withdrawn is entitled by members based on each member's contribution. Using this assumption, what percent of the withdrawal amount (F1) belongs to the first member of the club? (Input in decimal format i.e. 0.0X for X%, round your answer to 2 decimal places.) number (rtol=0.01, atol=0.01) ~ ~ 0% Question 4 Assume that the money withdrawn is entitled by members based on each member's contribution. Using this assumption, what percent of the withdrawal amount (F1) belongs to the last member of the club? (Input in decimal format i.e. 0.0X for X%, round your answer to 2 decimal places.) number (rtol=0.01, atol=0.01) x 0% Question 5 Now assume that club members want to withdraw the same total amount of money every year. How much money (A) can club members withdraw every year starting the end of year 11? (Round your answer to 2 decimal places.) number (rtol=0.01, atol=0.01) O x 0%
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