Mark deposits $50,000 now into an account which will eam interest at a rate of 7% per year, how much money can he withdraw annually, if he makes his first withdrawal 4 years from now and he wants to make a total of 8 withdrawals?

Mark deposits $50,000 now into an account which will eam interest at a rate of 7% per year, how much money can he withdraw annually, if he makes his first withdrawal 4 years from now and he wants to make a total of 8 withdrawals?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 11PROB

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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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