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You estimate that it will take five years to get established in your career.  Your parents want...

You estimate that it will take five years to get established in your career.  Your parents want to invest enough money today at 6% to enable you to withdraw $5,000 at the end of each year for the next five years with nothing left at the end of the five year period.  What amount of money needs to be invested today?

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Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=5000[1-(1.06)^-5]/0.06

=5000*4.21236379

=$21061.82(Approx).

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