Time Value of Money Calculation How much do you have to deposit today so that beginning...
Time Value of Money Calculation
How much do you have to deposit today so that beginning 11 years from now you can withdraw $10,000 a year for the next 5 years (periods 11 through 15) plus an additional amount of $15,000 in that last year (period 15)? Assume an interest rate of 9%.
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Homework Answers
Present value = Future value/(1+i)^n
i = interest rate per period
n= number of periods
Present value of deposits
= 10000/1.09^11 + 10000/1.09^12 + 10000/1.09^13 + 10000/1.09^14 + 10000/1.09^15 + 15000/1.09^15
= 20548.38
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Time Value of Money Calculation
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