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Ratling [72]
3 years ago
11

On January 1 a man deposit $5000 in a credit union that pays 8% interest, compounded annually. He wishes to withdraw all the mon

ey in five equal end-of-years sums, beginning December 31st of the first year. How much should he withdraw each year?
Business
1 answer:
zaharov [31]3 years ago
8 0

Answer:

he should withdraw $1,252.5 each year.

Explanation:

The computation is shown below:

Given that

Initial deposit (P) = $5,000

n = 5

i = 8%

Now the withdrawal amount is  

AW = P(A/P, i, n)

= $5,000 (A/P, 8%, 5)

= $5,000(0.2505)

= $1,252.5

Therefore, he should withdraw $1,252.5 each year.

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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Answer:

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In this way, it can increase employment and reduce consumer spending which in turn will prevent inflation.

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