Question

Your goal is to be able to withdraw $4,500 for each of the next ten years...

Your goal is to be able to withdraw $4,500 for each of the next ten years beginning one year from today. The return on the investment is expected to be 12%. The amount that needs to be invested today is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)

$33,466.

$45,000.

$41,820.

$25,426.

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Answer #1

Calculate present value

Present value = Amount*PVAF@12%

= 4500*5.65022

Present value = 25426

So answer is d) $25426

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