Ralph Benke wants to make 8 equal semiannual withdrawals of $8,000 from a fund that will...
Ralph Benke wants to make 8 equal semiannual withdrawals of $8,000 from a fund that will earn interest at 11% compounded semiannually. Required: How much would Ralph have to invest on: Round your answers to two decimal places. January 1, 2016, if the first withdrawal is made on July 1, 2016 $ 50,676.53 July 1, 2016, if the first withdrawal is made on July 1, 2016 $ January 1, 2016, if the first withdrawal is made on January 1, 2019 $
Homework Answers
Semiannual rate = 11*6/12=5.5%
Assuming today is Jan 1 2016
| July 1 2016 | Jan 1,2016 | |
| Amount to invest | PVA5.5%,8*Amount | PVAD5.5%,8*Amount |
| 6.33457*8000 | 6.68297*8000 | |
| $ 50676.56 | $ 53463.76 |
***Find present value annuity factor (both ordinary and annuity due )using financial calculator or from their table respectively
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