Wells Fargo offers a new savings product: You make the following payments over the next 5 years and will then receive a lump sum payment 25 years from now. Year Payment 1 300 2 400 3 500 4 600 5 700 The annual interest rate is 7% for the next 5 years, then 2% for the following 20 years. What is the future value of your investment in year 25

Wells Fargo offers a new savings product: You make the following payments over the next 5 years and will then receive a lump sum payment 25 years from now. Year Payment 1 300 2 400 3 500 4 600 5 700 The annual interest rate is 7% for the next 5 years, then 2% for the following 20 years. What is the future value of your investment in year 25

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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Year	Payment
1	300
2	400
3	500
4	600
5	700

Similar questions

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
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