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You have decided to start saving up to buy a house. You plan on withdrawing $25,000 at the end of year 4 for a down
You have decided to start saving up to buy a house. You plan on withdrawing $25,000 at the end of year 4 for a down payment, $18,000 at the end of year 5 and again $18,000 at the end of year 6 for upgrades, and $20,000 at the end of year 7 to add a pool. How much do you need to deposit today into an account with an annual interest rate of 1.25%? Question 1 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B P=? i = 1.25% i = 1.25% $18,000 $18,000 $20,000 $25,000 $18,000 $18,000 $20,000 $25,000 Option C Option D i = 1.25% i = 1.25% 4 7 0 PO? $18,000 $18,000 $18,000 $18,000 $20,000 $25,000 $20,000 $25,000
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