Assume you deposit $4,400 at the end of each year into an account paying 10.5 percent interest. a. How much money will you have in the account in 24 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you have if you make deposits for 48 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Assume you deposit $4,400 at the end of each year into an account paying 10.5 percent interest. a. How much money will you have in the account in 24 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you have if you make deposits for 48 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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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Question
Assume you deposit $4,400 at the end of each year into an account paying 10.5 percent interest. |
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a. | How much money will you have in the account in 24 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | How much will you have if you make deposits for 48 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Expert Solution
Step 1
The fixed periodic regular payments/deposits made at each periodic interval are recognized as annuity payments. The payment made at the period's end is the ordinary annuity and the one made in the beginning is the annuity due. The current worth of all the annuity payments made is the annuity's present value and their accumulated worth is the annuity's future value.
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