Required lump-sum payment-how large must the deposit be

Assignment Help Financial Management

Reference no: EM131013146

Required Lump-Sum Payment

To complete your last year in business school and then go through law school, you will need $35,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $35,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 5.34% interest a sum of money that is sufficient to provide the 4 payments of $35,000 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: EM131013146

Questions Cloud

Contemplating making a contribution to her traditional IRA : Sarah was contemplating making a contribution to her traditional IRA in 2014. She determined she would contribute $5,000 in December 2014, but forgot about making the contribution until she was preparing her 2014 tax return in February 2015. Use the ..

The amount of an invoice : The amount of an invoice from Franklin Decks and Porches is $5182.94 with terms of 4/7, 2/15, n/30. If the invoice is dated August 15, what amount should be paid on August 25?

About the growing annuity payments : You want to accumulate $3 millions by your retirement date, which is 25 years from now. You will make 25 deposits in your bank, with the first occurring today. The bank pays 7.82% interest, compounded annually. How much must your first deposit be to ..

Loan amortization-what fraction of the payment : Your company is planning to borrow $0.5 million on a 3-year, 8%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal?

Required lump-sum payment-how large must the deposit be : To complete your last year in business school and then go through law school, you will need $35,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $35,000 one year from today). How large must the deposit be? Ho..

Time for a lump sum to double : How long will it take $200 to double if it is deposited and earns the following rates? Round your answers to the closest year. [Notes: (1) This problem cannot be solved exactly with some financial calculators. If you are using a financial calculator,..

The spot rate on the euro : Kapinsky Capital Geneva (A). Christoph Hoffeman trades currency for Kapinsky Capital of Geneva. Christoph has $10 million to begin with, and he must state all profits at the end of any speculation in U.S. dollars. The spot rate on the euro is $1.3358..

Common fee arrangement for checking accounts : Which of the following is not a common fee arrangement for checking accounts?

Declining growth stock valuation : Declining Growth Stock Valuation Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are..

User Account

All Pages