Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show work using Excel Bonus question: Rework (a) assuming you plan on making monthly withdrawals of $7,000 for the next 8 years (rather than

Please show work using Excel image text in transcribed
Bonus question:
Rework (a) assuming you plan on making monthly withdrawals of $7,000 for the next 8 years (rather than $95,000 each year) and that the account will earn an annual percentage rate of 4% with monthly comprounding.
To complete your degree and then go through graduate school, you will need S95,000 at end of each of the next 8 years. Your Aunt offered to put you through school, and she will deposit in a bank paying 4.00% interest a sum of money that is sufficient to provide you with the needed 8 withdrawals of $95,000 each. How large of a deposit must she make today? a) b) How much will be in the account immediately after you make the 3rd $95,000 withdrawal? c) How much will be in the account immediately after you make all the withdrawals including the last one in 8 years? d) Now, if you decide to drop out of school today and not make any of the withdrawal, but instead keep your aunt's money, that she deposited today, in the account that is earning 4.00%, how much would you have at the end of 8 years

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

Step: 3

blur-text-image

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

Public Finance

Authors: Harvey Rosen, Ted Gayer

8th Edition

0073511285, 9780073511283

More Books

Students also viewed these Finance questions