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A woman currently has a $93,000 investment. (MUST BE DONE ON EXCEL) (a) If the interest...

A woman currently has a $93,000 investment. (MUST BE DONE ON EXCEL)

(a) If the interest rate is 6 percent, can she withdraw $14,000 for the next

10 years?

(b) If the interest rate is 9 percent, can she withdraw $14,000 for the next

10 years?

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Answer #1
Present investment $93,000.00
A
Withdrawl required $14,000.00
interest rate 6%
time (yrs) 10
Present value of withdrawl $1,03,041.22
As present value of withdrawl (103041.22) is greater than then present investment (93000), therefore it is not possible
B
Withdrawl required $14,000.00
interest rate 9%
time (yrs) 10
Present value of withdrawl $89,847.21
As present value of withdrawl (89847.21) is less than the present investment (93000), therefore it is possible

Showing formula in excel

Present investment 93000
A
Withdrawl required 14000
interest rate 0.06
time (yrs) 10
Present value of withdrawl =PV(E5,E6,-E4)
As present value of withdrawl (103041.22) is greater than then present investment (93000), therefore it is not possible
B
Withdrawl required 14000
interest rate 0.09
time (yrs) 10
Present value of withdrawl =PV(E11,E12,-E10)
As present value of withdrawl (89847.21) is less than the present investment (93000), therefore it is possible

pls comment if you require any further explanation on doing it in excel

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