Find the annual deposit of equal amount needed in Year 2 through Year 5

Find the annual deposit of equal amount needed in Year 2 through Year 5 (End of Year 2 through End of Year 5) to provide for annual withdrawals of $1,500 at the end of years 6, 7, 9 and 10 at an interest rate of 12% per year compounded yearly.

Expert Solution

Using formula P = F /(1+i)^t

Present worth of withdrawal at EOY 5 = 1500 / (1+0.12) + 1500 / (1+0.12)^2 + 1500 / (1+0.12)^4 + 1500 / (1+0.12)^5

= 1500 / (1.12) + 1500 / (1.12)^2 + 1500 / (1.12)^4 + 1500 / (1.12)^5

= 4339.49

Annual deposit amount from EOY 2 to EOY 5 = 4339.49 *(A/F,12%,4)

= 4339.49 *(0.12/((1 + 0.12)^4-1))

= 4339.49 *(0.12/((1.12)^4-1))

= 4339.49 *0.209234

= 907.97

Rahul Sunny answered 2 years ago

Find the amount needed to deposit into an account today that will yield a typical pension...

Find the amount needed to deposit into an account today that will yield a typical pension payment of $35,000 at the end of each of the next 30 years for the given annual interest rate. (Round your answer to the nearest cent.) 7.7% $_______

Find the compound amount for the deposit and the amount of interest earned. $230 at 5.2%...

Find the compound amount for the deposit and the amount of interest earned. $230 at 5.2% compounded semiannually for 17 years The compounded amount after 17 years is $____?. The amount of interest earned is $_____?

You plan to invest an amount of money in five (5) year certificate of deposit (CD)...

You plan to invest an amount of money in five (5) year certificate of deposit (CD) at your bank. The stated interest rate applied to the CD is 12 percent, compounded monthly and paid out at the end of the five years. How much must you invest today if you want the balance in the CD account to be $30,000 in seven (7) years? (Hint:Need to adjust time and interest rate for monthly compounding - e.g., time is 84 periods,...

Find the total amount of ’Deposit’ transactions at the bank Find the list of transactions (statement)...

Find the total amount of ’Deposit’ transactions at the bank Find the list of transactions (statement) of September 2019 (09/01/2019 to 09/30/2019) for account ’1111222233331441’ (note: look at the date format). Find the balance of ’1111222233331441’ before 09/01/2019 ((not including 09/01/2019). Find the name of the customer that deposited the highest amount with one transaction (include the transaction amount). The SQL code to solve these problems is below: DROP DATABASE IF EXISTS Bank; CREATE DATABASE Bank; USE Bank; DROP TABLE...

Find the amount of each of 5 payments made at the end of each year into...

Find the amount of each of 5 payments made at the end of each year into a 6% rate sinking fund which produces $21,000 at the end of 5 years. A. $2,053.18 B. $3,514.46 C. $3,725.32 D. $4,200.00

Find the amount of the level deposit made at the start of each week for 10...

Find the amount of the level deposit made at the start of each week for 10 years at a nominal annual rate of 5.2% compounded weekly that will permit payment of 10,000 at the start of each year perpetually starting at the beginning of the 11th year. Assume that a year is exactly 52 weeks.

Suppose the government decides for tax cut next year by an amount equal to $2 billion...

Suppose the government decides for tax cut next year by an amount equal to $2 billion a year. Along strictly monetary theory lines, using as your framework the equation of exchange, analyze the effect on money income, prices, and interest rates under three alternative sets of circumstances: 1. The cut in taxes is accompanied by an equal increase in the deficit, which is fully financed by increasing the money stock at a rate of $2 billion a year more than...

Case 2: By the end of each year, you contribute an equal amount of $3,300 per...

Case 2: By the end of each year, you contribute an equal amount of $3,300 per year to your retirement fund portfolio, which earns an annual nominal return of 11.25% averagely in the long term. The annual contribution continues for 36 years until you retire. (Note: All tax concerns are ignored.) (c) This time, considering the long-term annual inflation averages 3.05%. By your retirement, how much real money (at deflated real purchasing power) will you actually have in the account?...

Suppose the Blue Hand Hospitality Enterprises Co. wishes to set aside an equal, annual, end-of-year amount...

Suppose the Blue Hand Hospitality Enterprises Co. wishes to set aside an equal, annual, end-of-year amount in an investment account earning 9.50% per year over the next five years. The firm wants to have $5 million in the account when the account matures. How much must be deposited in the account at the end of each year? Group of answer choices $827,182.09 $891,410.73 $794,569.44 $844,200.00

What is the amount of 20 equal annual deposits that can provide 40 annual withdrawals when...

What is the amount of 20 equal annual deposits that can provide 40 annual withdrawals when a first withdrawal of $2,000 is made at the end of year 21 and subsequent withdrawals increase at the rate of 3 % per year over the previous year’s withdrawal. Determine the deposit amounts based on the interest rate of 7 % compounded annually.

Question