ISE 331 PS 4

4.73 Determine the value of P 0, as a function of H, for these two investment alternatives to be equivalent
at an interest rate of i = 15% per year:

4.81 Suppose that the parents of a young child decide to make annual deposits into a savings account,
with the first deposit being made on child’s fifth birthday and the last deposit being made on the 15 th
birthday. Then, starting on the child’s 18 th birthday, the withdrawals as shown will be made. If the
effective annual interest rate is 8% during this period of time, what are the annual deposits in years 5
through 15? Use a uniform gradient amount (G) in your solution. See Figure P4-81 below.