Leo will make an initial deposit into an account of $1000 at time t=0,
followed by five
annual deposits of $200 at times t = 1, 2, 3, 4, 5. Leo will receive
payments from the
account at times t = 7, 8, 9, starting at $1500 and decreasing by $Q
per year. The
balance in the account after the last payment is $0.
You may assume this account earns an effective annual interest rate of
7%.
Determine Q.
A. Less than $450
B. At least $450, but less than $490
C. At least $490, but less than $530
D. At least $530, but less than $570
E. $570 or more
I keep getting an answer of Q = $621.82 but the answer is B.
Can someone help me please?!?!?
Thanks,
Erica Szeto