Suppose that you wanted to be able to withdraw $10,000 at the end of Year 3 from a bank account that will pay you 5% interest in the first year, 7% interest in the second year, and 10% interest in the third year. What amount of money would you have to put in the bank today to be able to make that withdrawal at the end of Year 3 and have nothing left in the account after that withdrawal (round to the nearest dollar)?

Q: Suppose that you wanted to be able to withdraw $10,000 at the end of Year 3 from a bank account that will pay you 5% interest in the first year, 7% interest in the second year, and 10% interest in the third year. What amount of money would you have to put in the bank today to be able to make that withdrawal at the end of Year 3 and have nothing left in the account after that withdrawal (round to the nearest dollar)?

or

Q: Suppose that you wanted to be able to withdraw $10,000 at the end of Year 3 from a bank account that will pay you 5% interest in the first year, 7% interest in the second year, and 10% interest in the third year. What amount of money would you have to put in the bank today to be able to make that withdrawal at the end of Year 3 and have nothing left in the account after that withdrawal (round to the nearest dollar)?

• $8,092
• $4,420
• None of these are true
• $6,920
• $7,513

Explanation: The amount of money you would need to put in the bank today is approximately $8,101, which rounds to $8,092.