Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly? Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F:? F=? 1 120 I 1 120 l O 240 0 l I 240 A=1m i=6% A:100 I=0.5% Option C Option D F=? F=? 1 10 l 1 10 I | b 0 20 o 20 i = 0.5% i = 6% A = 100 A = 100 Question 4 Part B: Identify the correct Function Notation for this scenario. OF = 100(P/A,0.5%,10)(P/F, 0.5%, 10) O F = 100(F/A,6%,120)(P/F, 6%, 120) O F = 100(F/A,0.5%,120)(F/P, 0.5%, 120) O F = 100(F/A,6%,10)(F/P, 6%, 10)Question 4 Part C: Provide the final value for withdrawal at the end of year 20. Enter your answer in the form: 12345.67Question 4 Part D: Choose the statement that is most correct for your answer to Part C. O The amount found in part C will be available to withdraw at the end of year 20. O The amount found in part C will be available to withdraw at the end of each month if the account pays a nominal annual rate of 6% compounded monthly. 0 The amount found in part C will be available to withdraw if the account pays a nominal annual rate of 6% compounded monthly. 0 The amount found in part C will be available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly

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_2

Step: 3

blur-text-image_3

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

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

More Books

Students also viewed these Economics questions