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Please answer the questions so that the intermediate steps are easily understandable in the calculations. Here are the correct answers: For the question a), PV
Please answer the questions so that the intermediate steps are easily understandable in the calculations. Here are the correct answers:
- For the question a), PV of 1,000,000 = 228107, the exact constant annual deposit = 10363.
- For the question b), single deposit = 228107.
Please DO NOT use Excel!
Mr. Alface Medo wants to build a savings plan to get 1,000,000 fifty years from now. He is going to save every year a constant amount and deposit that amount in a bank deposit that yields 3% interest rate per year. He will start to save and deposit for the first time in 5 years, without any other deposit until then and do this for the last time in the 50th year, counting from now. a. What is the exact constant annual deposit Mr. Alface Medo must make to reach the 1,000,000 in due time? b. Instead of using this plan, you could make a single deposit right now. What would be the amount that guarantees the same goal, under the same deposit conditionsStep by Step Solution
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