You inherited $100,000 and deposit the funds (today at t = 0) in a saving institution where the money will grow at 7.8% interest for exactly n = 7 years. Then exactly one year later, (at n + 1) you start to withdraw the money in 6 annual equal withdrawals, depleting the account. How much can you withdraw to the nearest cent each year? Assume that the interest paid stay the same for both the period that the money is growing as well as after you start withdrawing it.
You inherited $100,000 and deposit the funds (today at t = 0) in a saving institution where the money will grow at 7.8% interest for exactly n = 7 years. Then exactly one year later, (at n + 1) you start to withdraw the money in 6 annual equal withdrawals, depleting the account. How much can you withdraw to the nearest cent each year? Assume that the interest paid stay the same for both the period that the money is growing as well as after you start withdrawing it.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...
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You inherited $100,000 and deposit the funds (today at t = 0) in a saving institution where the money will grow at 7.8% interest for exactly n = 7 years. Then exactly one year later, (at n + 1) you start to withdraw the money in 6 annual equal withdrawals, depleting the account. How much can you withdraw to the nearest cent each year? Assume that the interest paid stay the same for both the period that the money is growing as well as after you start withdrawing it.
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