The following formula is applicable;
A=P(1+r)^n
Where,
A = Total amount accrued after 10 years (this is the amount from which the yearly withdrawals will be made from for the 30 years after retirement)
P=Amount invested today
r= Annual compound interest for the 10 years before retirement
n= Number of years the investments will be made.
Therefore,
A= Yearly withdrawals*30 years = $25,000*30 = $750,000
r= 9% = 0.09
n= 10 years
P= A/{(1+r)^n} = 750,000/{(1+0.09)^10} = $316,808.11
Therefore, he should invest $316,808.11 today.
Questions answered for your homework good luck I also added the steps just if you forget
Could you show the whole question. The question is saying use the table to answer the question and the table is nowhere to be seen . So could you upload it with the picture of the table
Answer:
Simplified Answer: 1/3 Non-Simplified Answer: 5/15
Step-by-step explanation:
Make every fraction have a common denominator:
4/5 * 3/3 = 12/15
3/15 = 3/15
2/3 * 5/5 = 10/15
Add and/or Subtract the numerator(s):
12 + 3 = 15
15 - 10 = 5
Place the final numerator over the denominator (Non-simplified Answer):
5/15
Simplify (What can you divide the numerator and the denominator by to make the fraction into it's simplest from without any remainders?):
5 goes into both 5 and 15.
5/15 divided by 5 = 1/3
Simplified Answer:
1/3
