Required lump-sum payment

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Required Lump-Sum Payment

To complete your last year in business school and then go through law school, you will need $20,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $20,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 5.94% interest a sum of money that is sufficient to provide the 4 payments of $20,000 each. His deposit will be made today.

How large must the deposit be? Round your answer to the nearest cent.

$  

How much will be in the account immediately after you make the first withdrawal? Round your answer to the nearest cent.

$  

How much will be in the account immediately after you make the last withdrawal? Round your answer to the nearest cent. Enter "0" if required

$  

Reference no: EM131012272

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