You have just received an inheritance of $28,000 and would like to invest it into an account. the bank offers two investment plans, one for 4 years at 5.8% compounded annually and another for 3 years at 7.083% compounded annually. you want to make equal annual withdrawals from the account over the life time of the loan. which investment will yield the highest annual withdraw and by what amount, given that the account will be zeroed out by the end of that period? round your answer to the nearest cent.
a.
4 year account; $8,043.59
c.
4 year account; $10,436.34
b.
3 year account; $10,685.63
d.
3 year account; $8,281.88

Option B. 3 year account; $10,685.63

Step-by-step explanation:

We will use the formula of Present Value of Annuity

P =

Now solve for first plan for 4 years at 5.8% compounded annually.

where

P = Present value of annuity (28,000)

PMT = the amount of each annuity payment

r = rate per period  (5.8%) = 0.058

n = number of periods (4 years)

Hence

PMT = P ÷

= 28,000÷

=

=

=

=

= 8,043.58728  ≈ $8,043.59

Now solve for second plan 3 years at 7.083% compounded annually.

= 28,000÷

=

=

=

=

= 10,685.63007 ≈ $10,685.63

Second investment would yield the highest annual withdraw by $10,685.63.

Option B. 3 year account; $10,685.63

a) one student is chosen from classroom a, then a student is chosen from classroom b.  

step-by-step explanation:

independent events are ones in which the probability of one event does not affect the probability of the second event.

one student is chosen from classroom a; this does not affect the chances of choosing a student from classroom b.   this makes these independent events.

when one card is chosen from a standard deck and then set aside before a second card is chosen, the probability of the second card being chosen changes.   this makes them dependent events.

when one student is chosen from classroom a and then a second student is chosen from classroom a, the probability of choosing the second student changes.   this makes them dependent events.

when a letter is chosen from the alphabet and then a second letter is chosen, the probability of choosing the second letter changes.   this makes them dependent events.