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Sally Monroe wants to create a fund today that will enable her to withdraw $28,800 per...

Sally Monroe wants to create a fund today that will enable her to withdraw $28,800 per year for 6 years, with the first withdrawal to take place 4 years from today. Click here to view factor tables If the fund earns 8% interest, how much must Sally invest today? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.) Investment amount $

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Answer #1

ANSWER:

Present value=cash flows*Present value of discounting factor(rate%,time period)

=28,800/1.08^4+28,800/1.08^5+28,800/1.08^6+...............+28,800/1.08^9

=105,689.97

=$105,690 (Approx).

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