Mark deposits $40,000 now into an account which will earn interest at a rate of 8% per year, how much money can he withdraw annually, if he makes his first withdrawal 5 years from now and he wants to make a total of 10 withdrawals?

Mark deposits $40,000 now into an account which will earn interest at a rate of 8% per year, how much money can he withdraw annually, if he makes his first withdrawal 5 years from now and he wants to make a total of 10 withdrawals?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 24P

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Mark deposits $40,000 now into an account which will earn interest at a rate of 8% per year, how much money can he withdraw annually, if he makes his first withdrawal 5 years from now and he wants to make a total of 10 withdrawals?

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Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
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