ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Here are two ways of investing
$50,000
for
20
years.
Lump-Sum Deposit
|
Rate
|
Time
|
---|---|---|
$50,000
|
5%
compounded annually |
20
years |
Periodic Deposit
|
Rate
|
Time
|
---|---|---|
$2500
at the end of each year
|
5%
compounded annually |
20
years |
Use this information and the formulas
A=P(1+r)t
and
A=P(1+r)t−1r
to complete parts a. and b. below.Question content area bottom
Part 1
a.
|
After
20
years, how much more will you have from the lump-sum investment than from the annuity?You will have approximately
$enter your response here
more from the lump-sum investment than from the annuity.(Round to the nearest dollar as needed.)
|
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