Question

If he earns 5 percent on his money, how much must he deposit at the start of his studies to be able to withdraw $9,000 a year for three years?

Answer 1

Answer:

He must deposit $24,509.23 at the start of his studies.

Explanation:

The amount to be deposited, PV is calculated as follows :

r = 5

Pmt = $9,000

P/yr = 1

n = 3

Fv = $ 0

Pv = ?

Using a Financial Calculator, the amount to be deposited, PV is $24,509.23.