Question 1 1 pts You invest 1267 each year at the beginning of the year for...

Question

Question

Question 1 1 pts You invest 1267 each year at the beginning of the year for 7 years at a rate of 4%. How much can you withdraw in year 7?

business finance

Answer 1

Answer #1

Since equal amount is being deposited at periodic intervals, it is a case of annuity due

Future value = (1+r)*P[{(1+r)^n-1}/r]

Hence, amount that can be withdrawn at the end of 7 years = (1+0.04)*1,267[{(1+0.04)^7-1}/0.04]

=$10,407.42

Answer 2

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