Harry Rawlings wants to withdraw $10,000 (including principal) from an investment fund at the end of each year for 5 years. How
should he compute his required initial investment at the beginning of the first year if the fund earns 6% compounded annually?
1 answer:
Answer:
$44,651.06
Explanation:
We use the Present value function for this question. The calculation is shown in the attached spreadsheet
Data are given in the question
Future value = $0
Rate of interest = 6%
NPER = 5 years
PMT = $25,000
The formula is shown below:
= PV(Rate;NPER;-PMT;FV;type)
After solving this, the present value is $44,651.06
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<h3>What is the selling price?</h3>The selling price is the ultimate value of the goods the seller is willing to offer to the buyer at the time of sale. It is determined by adding up the profit margin to the actual cost of the goods.
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