Suppose you inherited $287,500 and invested it at 8.25% per year. How much could you withdraw...

Question

Question

Suppose you inherited $287,500 and invested it at 8.25% per year. How much could you withdraw at the beginning of each of the next 20 years.

$22,598.63 / $23,788.03 / $25,040.03 / $26,357.92 / $27,556.01

Answer 1

Answer #1

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

287,500=1.0825*Annuity[1-(1.0825)^-20]/0.0825

287,500=Annuity*10.4332951

Annuity=287,500/10.4332951

=$27556.01(Approx)

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Answer 2

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