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Quiz2_Spring09 - period he plans to increase the deposit at...

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CHEE 5369 / 6369 Quiz # 2 (Closed Book) Tuesday, February 3, 2009 A self - employed individual is opening a retirement account . His goal is to accumulate $1,000,000 by the time he retires in 20 years' time . A local bank is willing to open a retirement account that pays 8% interest compounded annually throughout the 20 years. The individual will deposit $25,000 immediately, and then deposit an equal amount "A" at the end ofeach ofyears 1to 5 . Starting with year 6,
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Unformatted text preview: period he plans to increase the deposit at the rate of 6% each year. Neglecting the effect of inflation, what should be the size of his deposit "A"?-1 s-\!-,-'r t. 7. f ' + r. I , A A / ' r 1 I 1 / .'. /, '-1':\ \ ( ,. J r V . Db C o-" , , , , , J; e-• . • . \-, L . A ( , 1 _ ~ W ( % I o .-g / \ b ) 1 . <; , V" i ) ~ < lo-:-\ ' ( ' f lr I O . Z I 20) +-/ . /...
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