You deposit $87000 into an account which pays 4% compounded quarterly. You leave the money in the account for 10 years. At the end of the 10 years, you plan to immediately start making quarterly withdrawals. You want to be able to make a total of 20 quarterly withdrawals. What size withdrawals can you make? You can make quarterly withdrawls of $. (Round to 2 decimal places.)
You deposit $87000 into an account which pays 4% compounded quarterly. You leave the money in the account for 10 years. At the end of the 10 years, you plan to immediately start making quarterly withdrawals. You want to be able to make a total of 20 quarterly withdrawals. What size withdrawals can you make? You can make quarterly withdrawls of $. (Round to 2 decimal places.)
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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You deposit $87000 into an account which pays 4% compounded quarterly. You leave the money in the account for 10 years. At the end of the 10 years, you plan to immediately start making quarterly withdrawals. You want to be able to make a total of 20 quarterly withdrawals. What size withdrawals can you make?
You can make quarterly withdrawls of $. (Round to 2 decimal places.)
Expert Solution
Step 1: Given Value
Compound = Quarterly = 4
Present Value = pv = $87,000
Interest Rate = r = 4 / 4 = 1%
Time = t = 10 * 4 = 40
Number of withdrawals = n = 20
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