Chp 4 examples - Part 2

Chp 4 examples - Part 2 - Example 8 What amount would need...

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Example 8 What amount would need to be paid at the end of each year into a savings account if at the end of 13 years (13 payments) you desired \$10,000? Annual interest rate is 7%. (Note that the last payment will coincide with the time of the \$10,000 balance.) Chap 4 examples - part 2

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Example 9 A person wishes to accumulate \$5,000 over a period of 15 years so that a cash payment can be made for a new roof on a summer cottage. To have this amount when it is needed, annual payments will be made into a savings account that earns 8% interest per year. How much must each annual payment be? Draw a cash-flow diagram. Chap 4 examples - part 2
Example 10 Suppose you make 15 equal annual deposits of \$1,000 each into a bank account paying 5% interest per year. The first deposit will be made 1 year from today. How much money can you withdraw immediately after the last deposit? Chap 4 examples - part 2

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Example 11 Frank has been making annual payments of \$2,500 to repay a college loan. He wishes to pay off the loan immediately after having made an annual payment,
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This note was uploaded on 02/07/2012 for the course IE 343 taught by Professor Vincent,g during the Spring '08 term at Purdue.

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Chp 4 examples - Part 2 - Example 8 What amount would need...

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