Your brotherhas offered to give you $100, starting next year, and after that growing at 3% for the next 20 years. You would like to calculate thevalue of this offer by calculating how much money you would need to deposit in the local bank so that the account will generate the same cash flows as he is offering you. Your local bank will guarantee a 6% annual interest rate so long as you have money in the account.
How much money will you need to deposit into the account today?
Using as excel spreadsheet, show explicitly that you can deposit this amount of money into the account, and every year withdraw what your brother has promised, leaving the account with nothing after the last withdrawal.
Recently Asked Questions
- Biology If a chemical interfered with the ability of RNA polymerase to bind to a DNA molecule, what would be the result
- Ramy Inc . and Sami Corp . each have assets of $ 10,000 and a return on common equity equal to 15 % . Ramy has twice as much debt and twice as many sales
- All of the following are classified as legal life estates that are created by statute EXCEPT