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FIN - Natasha plans to deposit $4,000 per year in her account

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Question;Natasha plans to deposit $4,000 per year in her account for each of the next 4 years. Thereafter, she expects to deposit $1,500 per year for another 4 years. All deposits are made at year-end. Interest rates are expected to be 8 percent for the next 2 years, and 11 percent thereafter. Interest is compounded annually. (a) What will Natasha\'s bank balance be at the end of year 8? [$35,438.96](b)How much would Natasha have to deposit as a lump sum today in order to accumulate the same bank balance at the end of year 8? [$16,244.10]

 

Paper#48719 | Written in 27-Jan-2016

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