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Unformatted text preview: Balance at EOY 8 = $100,000 (F/P, 8%, 8)  $8,880 (F/A, 8%, 8) = $100,000 (1.8509)  $8,880 (10.6366) = $90,636.99 Or P 8 =$8,880 (P/F, 8%, 22) = $8,880(10.2007)=$90636.99 New payment = $8,880 *3 =$26,640 Balance at EOY 12 = $90,636.99 (F/P, 8%, 4)  $26,640 (F/A, 8%,4) = $90,636.99 (1.3605)  $26,640 (4.5061) =$ 3,269.12 Q461. Suppose that the parents of a young child decide to make annual deposits into a saving account, with the first deposit being made on the childs 5 th birthday and the last deposit being made on the 15 th birthday. Then, starting on the childs 18 th birthday, the withdrawals as shown will be made. If the effective annual interest rate is 8% during this period of time, what are the annual deposits in years 5 through 15? Use a uniform gradient amount (G) in your solution. Please see the following figure. Solution by hand: A= [$2,000 (P/A, 8%, 4) +$400 (P/G, 8%, 4)] (P/F, 8%, 2) (A/F, 8%, 11) = [$2,000(3.3121)+$400(4.650)](0.8573)(0.0601)=$437.14...
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This note was uploaded on 11/02/2009 for the course PHYS 172 taught by Professor ? during the Spring '08 term at Purdue.
 Spring '08
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