The value of the three $1,500 payments at time t=3D6 is $3,936=2E47=2E
Therefore the value of the -Q and -2Q payments at time t=3D6 is=20=
$2,731=2E39-$3,936=2E47=3D-$1,205=2E08=2E
Or, $1,205=2E08=3DQ(v^2)+2Q(v^3)=2E With a little algebra,=20=
Q=3D$1,205=2E08*(1=2E07)^2/(1+2/1=2E07)=3D$480=2E87=2E
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The question reads:
Leo will make an initial deposit into an account of $1000 at time t=3D0,=20=
followed by five
annual deposits of $200 at times t =3D 1, 2, 3, 4, 5=2E Leo will receive paymen=
ts=20=
from the
account at times t =3D 7, 8, 9, starting at $1500 and decreasing by $Q per year=2E=
=20=
The
balance in the account after the last payment is $0=2E
You may assume this account earns an effective annual interest rate of 7%=2E
Determine Q=2E
A=2E Less than $450
B=2E At least $450, but less than $490
C=2E At least $490, but less than $530
D=2E At least $530, but less than $570
E=2E $570 or more
I keep getting an answer of Q =3D $621=2E82 but the answer is B=2E
Can someone help me please?!?!?
Thanks,
Erica Szeto