   Your brother has offered to give you $ 160​, starting next​ year, and after that growing...
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Your brother has offered to give you $ 160​, starting next​year, and after that growing at 2.5 % per year for the next 20years. You would like to calculate the value of this offer bycalculating how much money you would need to deposit in a localbank so that the amount will generate the same cash flows as he isoffering you. Your local bank will guarantee a 5.5 % annualinterest rate so long as you have money in the account.
a. How much money will you need to deposit into the account​today?
b. Assuming you deposited the amount of money in part ​(a​), andthen withdrew the required payments each​ year, calculate theremaining balance at the end of years​ 1, 2, 10 and 19.​ (Hint: Tosolve this problem it is best to use an excel​ spreadsheet.)  
  
Your brother has offered to give you $ 160​, starting next​year, and after that growing at 2.5 % per year for the next 20years. You would like to calculate the value of this offer bycalculating how much money you would need to deposit in a localbank so that the amount will generate the same cash flows as he isoffering you. Your local bank will guarantee a 5.5 % annualinterest rate so long as you have money in the account.
a. How much money will you need to deposit into the account​today?
b. Assuming you deposited the amount of money in part ​(a​), andthen withdrew the required payments each​ year, calculate theremaining balance at the end of years​ 1, 2, 10 and 19.​ (Hint: Tosolve this problem it is best to use an excel​ spreadsheet.)  
Answer & Explanation Solved by verified expert
A. To calculate the money to deposit in the account today
We need to find the present value of growing annuity = p/(r-g)*
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