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Problem 4-24 Required Lump-Sum Payment To complete your last year in business school and then go...

Problem 4-24
Required Lump-Sum Payment

To complete your last year in business school and then go through law school, you will need $35,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $35,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 7.15% interest a sum of money that is sufficient to provide the 4 payments of $35,000 each. His deposit will be made today.

  1. How large must the deposit be? Round your answer to the nearest cent.
    $  
  2. How much will be in the account immediately after you make the first withdrawal? Round your answer to the nearest cent.
    $  

    How much will be in the account immediately after you make the last withdrawal? Round your answer to the nearest cent. Enter "0" if required
    $  
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Homework Answers

Answer #1
1 PV of Amount required $118,152.05

2: Balance after first withdrawal =

$91,599.92

3: Balance after last = 0

WORKINGS

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