Question

In: Economics

what is the present worth of $2,757 in year 1 and amounts increasing by $109 per...

what is the present worth of $2,757 in year 1 and amounts increasing by $109 per year through year 5 at an interest rate of 10% per year?

if an investment account gives 5% interest annually, how much equal annual deposits you have to make for 10 years starting year 1 to have a $174,468 at your account at the end of this investment.

Solutions

Expert Solution

what is the present worth

=2757/(1+10%)^1+(2757+109*1)/(1+10%)^2+(2757+109*2)/(1+10%)^3+(2757+109*3)/(1+10%)^4+(2757+109*4)/(1+10%)^5

=11199.14

equal annual deposits=174468/(((1+5%)^10-1)/5%)=13871


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