A chemical engineer wants to deposit an amount now such that she can withdraw an equal annual amount of S3000 per vear for the first 5 years, starting 1 year after the deposit and a different annual withdrawal of $2000 per year for the following 3 years. How would the cash flow diagram appear if the account earns rate of interest of 8.5% per year. Determine the amount of initial deposit made by the engineer after writing the initial set up equation for the cash flow. What is the present worth of equal annual amounts deposited for the first five years based on your calculations

A chemical engineer wants to deposit an amount now such that she can withdraw an equal annual amount of S3000 per vear for the first 5 years, starting 1 year after the deposit and a different annual withdrawal of $2000 per year for the following 3 years. How would the cash flow diagram appear if the account earns rate of interest of 8.5% per year. Determine the amount of initial deposit made by the engineer after writing the initial set up equation for the cash flow. What is the present worth of equal annual amounts deposited for the first five years based on your calculations

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 1E

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A chemical engineer wants to deposit an amount now such that she can withdraw an equal annual amount of S3000 per vear for the first 5 vears, starting 1 year after the deposit, and a different annual withdrawal of $2000
per year for the following 3 years.
How would the cash flow diagram appear if the account earns rate of interest of 8.59% per year.
Determine the amount of initial deposit made by the engineer after writing the initial set up equation for the cash flow.
What is the present worth of equal annual amounts deposited for the first five years based on your calculations

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