Question 2 (13 marks) X A deposit X is to be made now and a second deposit is to be made 2 years from now to provide for

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Question 2 13 Marks X A Deposit X Is To Be Made Now And A Second Deposit Is To Be Made 2 Years From Now To Provide For 1 (82.58 KiB) Viewed 38 times

Question 2 (13 marks) X A deposit X is to be made now and a second deposit is to be made 2 years from now to provide for withdrawals of $1,000 one year from now and $2,000 five years from now. The annual effective rate of interest is 5%. (a) Draw the time diagram for this problem. [3] (b) Using time 0 as the reference time point, set up an appropriate equation of value and determine X. Round your answer to the nearest cent. [3] (c) Using time 5 as the reference time point, set up an appropriate equation of value and determine X. Round your answer to the nearest cent. [3] (d) Using time 3 as the reference time point, set up an appropriate equation of value and determine X. Round your answer to the nearest cent. Hint: the value for X should be the same regardless of the reference point chosen. Small discrepancies due to rounding are acceptable.