The amount of withdrawal today should be $13,019.136
<h3>What is interest?</h3>
In finance and economics, interest is the payment of an amount above repayment of the principal sum by a borrower or deposit-taking financial institution to a lender or depositor at a specific rate by a borrower or depositor. It differs from a fee that the borrower may pay to the lender or a third party.
When the effects of compounding over time are considered, an effective annual interest rate is the real return on a savings account or any interest-paying investment. It also reflects the actual percentage rate of interest owed on a loan, credit card, or other debt.
Simple (regular) interest, accrued interest, and compounding interest are the three types of interest.
Given that,
Your grandmother just died and left you $47,500 in a trust fund that pays 6.5% interest.
You must spend the money on your college education, and you must withdraw the money in 4 equal installment
calculation:
47,500 = X ( 1 - (1.065)^-4 ) ÷ ( .065 ÷ 1.065 )
Or
N = 4
I / Y = 6.5
PV = -47,500
FV = 0
The excel formula is
=-PMT(RATE, NPER, PV, FV,TYPE)
Learn more about the interest rate here:
brainly.com/question/4626564
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