Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $1,300 per quarter for 20 years, if the account earns 4% per year
Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $1,300 per quarter for 20 years, if the account earns 4% per year
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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Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.)
$1,300 per quarter for 20 years, if the account earns 4% per year
Expert Solution
Step 1: Introduction:
The present value of the annuity is the discounted worth that is defined as the process of determining the present value of a payment or a stream of cash flow, which is likely to be received in the future. The time value factor states the change in worth given its capacity to earn interest.
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Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.)
$1,300 per quarter for 20 years, if the account earns 4% per year
PV = $
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