Question
You work at a restaurant, but you want to start making a plan for the future. Three investments (payments, if you will) are made over
You work at a restaurant, but you want to start making a plan for the future. Three investments (payments, if you will) are made over a five-year period. You have a great year your first year, ($10,000 towards savings at the end of the year), a fairly good year your second year ($6000 at the end of the second year), a wicked third year where you wash out all profits (i.e. zero investment opportunity that year) because of a car accident that wasnt your fault, and a $15,000 insurance check for the car accident that finally came at the end of the fourth year. School starts at the end of year five. Assuming 12% annual interest (compounding annually), a.) SHOW YOUR CASH FLOW DIAGRAM FOR THE FIVE YEARS, ASSUMING YOU WANT TO WITHDRAWAL ALL FUNDS AT THE END OF YEAR? (5 pts) b.) What is the future value of all your investments at the end of year five? (15 pts)
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