These are Economics/Accounting Questions: How much needs to be deposited at t = 0 into a fund
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These are Economics/Accounting Questions:
- How much needs to be deposited att= 0 into a fund paying 4% compounded per period in order to withdraw $3000 att= 1, $1000 att= 3, and $850 att= 7 so that the fund is depleted at the last withdrawal? (Draw a cash flow diagram.)
- A loan of $2000 is to be paid off in 8 equal annual payments. The interest rate is 4% per year compounded annually. If the first payment is made at EOY 1, what is the annual payment? (Draw a cash flow diagram.)
- For the previous problem, if the first payment is made at EOY 0, what is the annual payment? (Draw a cash flow diagram.)
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