Sarah N. Dippity believes the world will end in exactly five years. She has $400,000 in a bank account earning 6% interest annually. Sarah wants to withdraw an equal amount each of the next five years for her living expenses. She would also like to have exactly $50,000 left in the account after five years to spend on one huge party just as the world is ending. What should be the size of her annual withdrawals?
Sarah N. Dippity believes the world will end in exactly five years. She has $400,000 in a bank account earning 6% interest annually. Sarah wants to withdraw an equal amount each of the next five years for her living expenses. She would also like to have exactly $50,000 left in the account after five years to spend on one huge party just as the world is ending. What should be the size of her annual withdrawals?
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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Sarah N. Dippity believes the world will end in exactly five years. She has $400,000 in a bank account earning 6% interest annually. Sarah wants to withdraw an equal amount each of the next five years for her living expenses. She would also like to have exactly $50,000 left in the account after five years to spend on one huge party just as the world is ending. What should be the size of her annual withdrawals?
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