How much do you have to deposit today so that beginning 11 years from now you ca

Question

How much do you have to deposit today so that beginning 11 years from now you can withdraw $15,000 a year for the next 7 years (years 11 to 17) plus an additional amount of $30,000 in the last year (year 17)? Assume an interest rate of 9%
How much do you have to deposit today so that beginning 11 years from now you can withdraw $15,000 a year for the next 7 years (years 11 to 17) plus an additional amount of $30,000 in the last year (year 17)? Assume an interest rate of 9%
How much do you have to deposit today so that beginning 11 years from now you can withdraw $15,000 a year for the next 7 years (years 11 to 17) plus an additional amount of $30,000 in the last year (year 17)? Assume an interest rate of 9%

Explanation / Answer

Therefore the amount of deposit today is 38821.8 or 38822

year Cash flows Discount factor @9% Present value 0 0 1 0 1 0 0.917431193 0 2 0 0.841679993 0 3 0 0.77218348 0 4 0 0.708425211 0 5 0 0.649931386 0 6 0 0.596267327 0 7 0 0.547034245 0 8 0 0.50186628 0 9 0 0.46042778 0 10 0 0.422410807 0 11 15000 0.38753285 5812.993 12 15000 0.355534725 5333.021 13 15000 0.326178647 4892.68 14 15000 0.299246465 4488.697 15 15000 0.274538041 4118.071 16 15000 0.251869763 3778.046 17 45000 0.231073177 10398.29 Present value 38821.8

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