Suppose two $100 withdrawals are made, the first in 2022 and the second in 2026, emptying an account that earns 5% interest, compounded annually. What amount was deposited when the account was originally opened in 2020?

Suppose two $100 withdrawals are made, the first in 2022 and the second in 2026, emptying an account that earns 5% interest, compounded annually. What amount was deposited when the account was originally opened in 2020?

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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Question

4a.
Suppose two $100 withdrawals are made, the first in 2022 and the second in 2026, emptying an account that earns 5%
interest, compounded annually. What amount was deposited when the account was originally opened in 2020?
Un dit
night not bo quardod in the absence of mnemonic notation le g F(P/E i p)l.

Expert Solution

Step 1f

Amount withdrawn $100.

Rate 5%.

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