You have 100,000 in a saving account earning 6.4 percent. you now want to make 9...

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You have 100,000 in a saving account earning 6.4 percent. you now want to make 9...

You have 100,000 in a saving account earning 6.4 percent. you now want to make 9 equal yearly withdrawals depleting the saving account. How much are your withdrawals?

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Answer 1

Answer #1

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Answer:

Information provided:

Present value= $100,000

Interest rate= 6.4%

Time= 9 years

The amount of yearly withdrawals is calculated using the dividend discount model. It is calculated using the below formula:

PV= 100,000

I/Y= 6.4

N= 9

Press the CPT key and PMT to compute the amount of yearly withdrawal.

The value obtained is 14959.22

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Answer 2

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