FIN - Natasha plans to deposit $4,000 per year in her account
Question # 00026743
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Updated on: 09/26/2014 12:42 AM Due on: 09/26/2014
Natasha plans to deposit $4,000 per year in her account for each of the next 4 years. Thereafter, she expects to deposit $1,500 per year for another 4 years. All deposits are made at year-end. Interest rates are expected to be 8 percent for the next 2 years, and 11 percent thereafter. Interest is compounded annually.
(a) What will Natasha's bank balance be at the end of year 8? [$35,438.96]
(b)How much would Natasha have to deposit as a lump sum today in order to accumulate the same bank balance at the end of year 8? [$16,244.10]
(b)How much would Natasha have to deposit as a lump sum today in order to accumulate the same bank balance at the end of year 8? [$16,244.10]
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Rating:
/5
Solution: FIN - Natasha plans to deposit $4,000 per year in her account