Mary wants to accumulate $45,000 in today\'s dollar terms in the next 6 years. S
ID: 2638547 • Letter: M
Question
Mary wants to accumulate $45,000 in today's dollar terms in the next 6 years. She expects to earn a return of 6.25% per year and inflation is expected to be 1.75%.
A) How much should be the serial payment in the 1st year so that Mary can achieve the target?
$6713; $6523; $7133; or $6830
B) How much should be the serial payment in the 2nd year so that Mary can achieve the target?
$6637; $7258; $6830; or $6950
C) How much should be the serial payment in the 5th year so that Mary can achieve the target?
$7645; $7196; $7321; or $6991
Explanation / Answer
A) How much should be the serial payment in the 1st year so that Mary can achieve the target?
answer =$7133;
B) How much should be the serial payment in the 2nd year so that Mary can achieve the target?
answer = $6830;
C) How much should be the serial payment in the 5th year so that Mary can achieve the target?
answer = $7196;