Hey guys,
Have what I presume to be a pretty easy question to answer process wise as I can't seem to find a worked solution in my lecture notes, textbook or even online.
The question is: Mike is watching the Beijing olympics (2008) and decids he wants to go to the next four olympics starting at London and proceeding for the next four games so 2012, 2016, 2020, 2024. Each trip to a games will cost him 10,000 and he wants to know how much he should have at the end of the Beijing games to be able to afford the next 4 trips if interest rates are 5.3% compounded quarterly?
What I don't fully understand is whether you include the interest earned on the starting sum inbetween withdrawals. I imagine we only need the bank balance to be zero after the last withdrawal but I have no idea how to approach this. As I said I have a feeling this may be easier than I am making it.
Any help would be much appreciated!
Thanks in advance.
Have what I presume to be a pretty easy question to answer process wise as I can't seem to find a worked solution in my lecture notes, textbook or even online.
The question is: Mike is watching the Beijing olympics (2008) and decids he wants to go to the next four olympics starting at London and proceeding for the next four games so 2012, 2016, 2020, 2024. Each trip to a games will cost him 10,000 and he wants to know how much he should have at the end of the Beijing games to be able to afford the next 4 trips if interest rates are 5.3% compounded quarterly?
What I don't fully understand is whether you include the interest earned on the starting sum inbetween withdrawals. I imagine we only need the bank balance to be zero after the last withdrawal but I have no idea how to approach this. As I said I have a feeling this may be easier than I am making it.
Any help would be much appreciated!
Thanks in advance.