How much would howard steele need to invest today so that he may withdraw $12,000 each year for the next 20 years, assuming a ra
te of 8% compounded annually? (use the tables in the handbook.) $117,817.20 $454,144.00 $112,817.20 $549,144 none of these?
2 answers:
Answer:
$117,817.20.
Explanation:
We need to get how much would Howard Steele need to invest today so that he may withdraw $12,000 each year for the next 20 years, assuming a rate of 8% compounded annually. The annual withdrawal target is $12000 multiply by the PVIFA (8%, 20) which is equal to 9, 81810 .
For the target period the amount that need to be invested today is $117,817.20.
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Answer:
$594.57
Explanation:
For computing the monthly payment we need to apply the PMT formula i.e to be shown in the attachment below:
Given that,
Present value = $31,000
Future value or Face value = 0
Rate = 5.67% ÷ 12 months = 0.4725
NPER = 5 years × 12 = 60 years
The formula is shown below:
= PMT(RATE;NPER;-PV;FV;type)
The present value come in negative
So, after applying the formula, the monthly payment is $594.57
