Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. how do i find the interest rate? assume you ha

how do i find the interest rate? Assume you have just...

80.2K

Verified Solution

Question

Finance

how do i find the interest rate?
image
Assume you have just deposited $2100 in a bank account. Five months from today, you plan to make the first of a series of annual withdrawals from the account. Your first withdrawal will equal $250, will continue through nine years and five months from today, and will grow by 3% each. a. Set up the calculations to determine the interest rate on your account. Note: You do not need to solve anything. Just set up all equations, plug in all the numbers you would need to solve the equations, and indicate which variable you are solving for (in each equation). b. Assume that just before you make your deposit, the bank raises the interest rate on the account. Will you be able to increase or must you reduce your first withdrawal. Note: A one-word answer is sufficient! c. Assume you decide to make your final withdrawal eight years and five months from today instead of nine years and five months from today. Will you be able to increase or must you reduce your first withdrawal (relative to your answer in b). Hint: This will reduce the number of withdrawals you make

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