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If you have $30,000 in a savings account earning 10 percent, how large an annuity can you draw out each year if you want nothing left at the end of 8 years? PV Rate N year years Payment ? yearly PMT

If you have $30,000 in a savings account earning 10 percent, how large an annuity can you draw out each year if you want nothing left at the end of 8 years? PV Rate N year years Payment ? yearly PMT

Essentials Of Investments
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
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**Question:** If you have $30,000 in a savings account earning 10 percent, how large an annuity can you draw out each year if you want nothing left at the end of 8 years? **Table Details:** - **PV (Present Value):** [Blank] - **Rate:** [Blank] per year - **N (Number of Periods):** [Blank] years - **Payment:** ? yearly - **PMT (Payment):** [Blank] **Explanation:** This problem involves calculating the annuity payments you can withdraw from a savings account with a specified present value, interest rate, and duration. Here, the present value (PV) is the initial amount in the account, the rate is the annual interest rate, and N is the number of years until the account should have a balance of zero. The goal is to determine the annual payment (PMT) you can withdraw. The blanks in the table are placeholders for entering data during the calculation process. These values are essential inputs for financial formulas used to solve annuity problems.
Transcribed Image Text:**Question:** If you have $30,000 in a savings account earning 10 percent, how large an annuity can you draw out each year if you want nothing left at the end of 8 years? **Table Details:** - **PV (Present Value):** [Blank] - **Rate:** [Blank] per year - **N (Number of Periods):** [Blank] years - **Payment:** ? yearly - **PMT (Payment):** [Blank] **Explanation:** This problem involves calculating the annuity payments you can withdraw from a savings account with a specified present value, interest rate, and duration. Here, the present value (PV) is the initial amount in the account, the rate is the annual interest rate, and N is the number of years until the account should have a balance of zero. The goal is to determine the annual payment (PMT) you can withdraw. The blanks in the table are placeholders for entering data during the calculation process. These values are essential inputs for financial formulas used to solve annuity problems.
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