A child age 3 is given $20,000. The amount is put into savings account which pays 4% compounded annually. If the child takes the money out in eight equal annual payments with the first in 15 years, what is the size of each withdrawal?

A child age 3 is given $20,000. The amount is put into savings account which pays 4% compounded annually. If the child takes the money out in eight equal annual payments with the first in 15 years, what is the size of each withdrawal?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

A child age 3 is given $20,000. The amount is put into
savings account which pays 4% compounded
annually. If the child takes the money out in eight
equal annual payments with the first in 15 years,
what is the size of each withdrawal?
$34,633.53
$5144.04
$297.06
$5349.80
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