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Accounting

Problem:

Starting next year, you will need $10,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $10,000.) Your uncle deposits an amount today in a bank paying 5% annual interest, which will provide the needed $10,000 payments.

Required:

Question 1: How large must the deposit be?

Question 2: How much will be in the account immediately after you make the first withdrawal?

Note: Please show how you came up with the solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171889

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