Homework Answers
The answer will be "$22500 times the present value of a 5 year, 12% ordinary annuity of 1". (i.e. the 1st option)
Explanation: Here as the withdrawals are being done at the end of each year it is an ordinary annuity or a deferred annuity. Also required initial invetsment = $22500*present value interest factor of ordinary annuity when r = 12% and n = 5 years.
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