Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. (comprehensive problem) you would like to have $57

(Comprehensive problem) You would like to have $57,000 in 12 years. To accumulate this amount,...

60.1K

Verified Solution

Question

Accounting

(Comprehensive problem) You would like to have $57,000 in 12 years. To accumulate this amount, you plan to deposit an equal sum in the bank each year that will earn 9 percent interest compounded annually. Your first payment will be made at the end of the year.

a.How much must you deposit annually to accumulate this amount?

b.If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 9

percent on this deposit.)

c.At the end of five years, you will receive $10,000 and deposit this in the bank toward your goal of $57,000 at the end of year 12. In addition to the lump-sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Again, assume you can earn 9 percent on your deposits.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students