Mia will retire 10 years from now and wants to establish a fund today that will pay $30,000 cash at the end of each of the first five years after retirement. Specific dates are these: date of a single deposit by Mia, January 1, year 1; date of first cash payment from the fund to Mia, December 31, year 11. The fund will pay 10% compound interest. How much cash must Mia deposit on January 1, year 1, to provide the five equal annual year-end cash payments from the fund?
Mia will retire 10 years from now and wants to establish a fund today that will pay $30,000 cash at the end of each of the first five years after retirement. Specific dates are these: date of a single deposit by Mia, January 1, year 1; date of first cash payment from the fund to Mia, December 31, year 11. The fund will pay 10% compound interest. How much cash must Mia deposit on January 1, year 1, to provide the five equal annual year-end cash payments from the fund?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 13E
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Mia will retire 10 years from now and wants to establish a fund today that will pay $30,000 cash at the end of each of the first five years after retirement. Specific dates are these: date of a single deposit by Mia, January 1, year 1; date of first cash payment from the fund to Mia, December 31, year 11. The fund will pay 10%
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