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In this question the following formulae may be used: (1 + i)". – 1 FV = PMT- i PV = PMT!-(1+i)" i Ten years ago, Max's grandparents started an investment to help cover the costs of her university studies. At the end of each month, they deposited $200 into an account earning interest at a rate of 4.5% per annum, compounded monthly. After 4 years, the annual interest rate paid by the account dropped to 3.6% , compounded monthly, and Max's grandparents increased their monthly payment into the account to $300 . (a) Calculate the current balance of the account. (b) Max is now ready to begin her university studies. Her grandparents have stopped depositing into the account but the account continues to earn interest at an annual rate of 3.6% , compounded monthly. Max makes withdrawals of $600 per month. Calculate the number of withdrawals which Max is able to make.

In this question the following formulae may be used: (1 + i)". – 1 FV = PMT- i PV = PMT!-(1+i)" i Ten years ago, Max's grandparents started an investment to help cover the costs of her university studies. At the end of each month, they deposited $200 into an account earning interest at a rate of 4.5% per annum, compounded monthly. After 4 years, the annual interest rate paid by the account dropped to 3.6% , compounded monthly, and Max's grandparents increased their monthly payment into the account to $300 . (a) Calculate the current balance of the account. (b) Max is now ready to begin her university studies. Her grandparents have stopped depositing into the account but the account continues to earn interest at an annual rate of 3.6% , compounded monthly. Max makes withdrawals of $600 per month. Calculate the number of withdrawals which Max is able to make.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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(i) In this question the following formulae may be used: .(1+ i)" – 1 .1-(1+і) " FV = PMT PV = PMT i Ten years ago, Max's grandparents started an investment to help cover the costs of her university studies. At the end of each month, they deposited $200 into an account earning interest at a rate of 4.5% per annum, compounded monthly. After 4 years, the annual interest rate paid by the account dropped to 3.6% , compounded monthly, and Max's grandparents increased their monthly payment into the account to $300. (а) Calculate the current balance of the account. (b) Max is now ready to begin her university studies. Her grandparents have stopped depositing into the account but the account continues to earn interest at an annual rate of 3.6% , compounded monthly. Max makes withdrawals of $600 per month. Calculate the number of withdrawals which Max is able to make.
Transcribed Image Text:(i) In this question the following formulae may be used: .(1+ i)" – 1 .1-(1+і) " FV = PMT PV = PMT i Ten years ago, Max's grandparents started an investment to help cover the costs of her university studies. At the end of each month, they deposited $200 into an account earning interest at a rate of 4.5% per annum, compounded monthly. After 4 years, the annual interest rate paid by the account dropped to 3.6% , compounded monthly, and Max's grandparents increased their monthly payment into the account to $300. (а) Calculate the current balance of the account. (b) Max is now ready to begin her university studies. Her grandparents have stopped depositing into the account but the account continues to earn interest at an annual rate of 3.6% , compounded monthly. Max makes withdrawals of $600 per month. Calculate the number of withdrawals which Max is able to make.
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