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The sum of $5200 is deposited into an account paying 10%annually. If $ 800 is...

The sum of $5200 is deposited into an account paying 10% annually. If $ 800 is withdrawn at the end of years 1, year 2 and year 3, how much remains in the account at the end of year 3?

Solutions

Expert Solution

The amount is computed as follows:

Future value = Present value x (1 + r)n

= $ 5200 x 1.10 + ($ 5200 - $ 800) x 1.10 + ($ 5200 - $ 800 - $ 800) x 1.10 + $ 5200 - $ 800 - $ 800 - $ 800

= $ 5,720 + $ 4,840 + $ 3,960 + $ 2,800

= $ 17,320

jeff jeffy answered 2 years ago
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