Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)…..

Brief Exercise 6-10

Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)

Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 1
Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 2
Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 3
Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 4
Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 5
Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 6

How much must he invest today if the first withdrawal is at year-end? How much must he invest today if the first withdrawal takes place immediately? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.)

First withdrawal at year-end $Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 7
First withdrawal immediately $Question & Answer: Henry Quincy wants to withdraw $37,820 each year for 11 years from a fund that earns 9% interest. (Use the tables below.)..... 7

Expert Answer

 

1.Present value=$37820*Present value of annuity factor(9%,11)

=$37820*6.80519(Approx)

=$257,372(Approx).

2.Present value=$37820*Present value of annuity factor(9%,11)(Beginning of year compounding)

=$37820*7.41766(Approx)

=$280,536(Approx).

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