USA: +1 725-224-8795
USA: +1 725-224-8795

Question & Answer: 2.40 A company that manufactures purgeable hydrogen sulfide monitors will make deposts such that each one is 7% l…..

2.40 A company that manufactures purgeable hydrogen sulfide monitors will make deposts such that each one is 7% larger than the preceding one. How large must the first deposit at the end of year 1 be if the deposits extend through year 10 and the fourth deposit is $5550? Use an interest rate of 10% per year

2.40 A company that manufactures purgeable hydrogen sulfide monitors will make deposts such that each one is 7% larger than the preceding one. How large must the first deposit at the end of year 1 be if the deposits extend through year 10 and the fourth deposit is $5550? Use an interest rate of 10% per year

Expert Answer

 

Fourth deposit = 5550 and each deposit increases by 7%

Therefore deposit at the end of year 1 must have increase by 7% for 3 years continuously to arrive at 5550 at 4th year end

Deposit in first year = 5550 / ( 1 + 7%)^3

= 4530.45

Still stressed from student homework?
Get quality assistance from academic writers!
Order now