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serg [7]
3 years ago
7

If you wanted to withdraw $12,000 from a bank account at the end of each of the next 20 years, approximately how much would you

have to invest in the account today assuming a 6% interest rate?
Business
1 answer:
Marizza181 [45]3 years ago
5 0

Answer:

Present value of annuity P = $137,639.05 (Approx)

Explanation:

Given:

Amount withdraw A = $12,000

Number of year n = 20

Rate r = 6%

Find:

Present value of annuity P

Computation:

P = A[1-(1+r)⁻ⁿ]/r

P = 12,000[1-(1.06)⁻²⁰]/0.06

P = 12,000 x 11.46992122

P = 137,639.05 (Approx)

Present value of annuity P = $137,639.05 (Approx)

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8 0
1 year ago
The following information pertains to Ash Co., which prepares its statement of cash flows using the indirect method: Interest pa
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$30,000

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