   Chapter M, Problem 9RE ### Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

#### Solutions

Chapter
Section ### Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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# If $80,000 is invested in a fund on December 31, 2019, what is the amount of each of 6 annual withdrawals starting on December 31, 2020, that would deplete the fund if the interest rate earned in the fund is 10% compounded annually? To determine Determine the amount of each of six annual withdrawals. Explanation Annuity: An annuity is referred as a sequence of payment of fixed amount of cash flows that occurs over the equal intervals of time. Determine the cash flow of each time period. Present valueO= Cash flow ×(pOn,i)$80,000= Cash flow ×(pOn=6,i=10%)\$80,000= Cash flow ×4

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