Suppose you earned a $335,000 bonus this year and invested it at 8.25% per year. How...

Question

Question

Suppose you earned a $335,000 bonus this year and invested it at 8.25% per year. How much could you withdraw at the end of each of the next 20 years?

Select the correct answer.

a. $34,746.72

b. $34,741.22

c. $34,752.22

d. $34,757.72

e. $34,735.72

Answer 1

Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

335,000=Annuity[1-(1.0825)^-20]/0.0825

335,000=Annuity*9.638147907

Annuity=335,000/9.638147907

=$34757.72(Approx).

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Answer 2

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