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Warren would like to accumulate $ 1 , 6 0 0 in a bank account by depositing monthly payments of a fixed size into the
Warren would like to accumulate $ in a bank account by depositing monthly
payments of a fixed size into the account at the end of each month which pays a certain
rate of interest compounded monthly.
Warren calculates the number of payments that will be required, and arrives at an answer
of He decides to deal with the fact that this is not a whole number by making a
balloon payment. This means that:
Warren will make monthly payments and at some point between the end of the
th month and the end of the th month he will deposit the difference between
$ and what he has accumulated up to that point.
Warren will make monthly payments in order to deliberately accumulate more
than he originally required.
Warren will make monthly payments and on the day of the th payment, he
will deposit the difference between $ and what he has accumulated up to that
point.
Warren will make monthly payments, and allow these payments to accumulate
to the end of the th month. At that time, he will deposit the difference between
$ and what he has accumulated up to that point.
Warren will make monthly payments and get a refund of the overage a month
later.
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