Al Vincent has decided to retire to Arizona in 10 years. What amount should Al invest today so that he will be able to withdraw $28,000 at the end of each year for 15 years after he retires? Assume he can invest the money at 8% interest compounded annually. (Use the Table 13.2 and Table 12.3.) Note: Do not round intermediate calculations. Round your answer to the nearest cent. Present value TABLE 12.3 Present value of $1 at end of period. Period 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 35 40 1% 9901 9803 9706 9610 9515 9420 9327 9235 9143 .9053 .8963 .8874 .8787 .8700 .8613 .8528 .8444 .8360 .8277 .8195 .8114 .8034 7954 .7876 .7798 .7720 .7644 .7568 .7493 .7419 .7059 .6717 1% .9852 9707 9563 9422 .9283 .9145 .9010 .8877 .8746 .8617 .8489 .8364 .8240 .8119 .7999 .7880 .7764 .7649 .7536 .7425 .7315 .7207 .7100 .6995 .6892 .6790 .6690 .6591 .6494 .6398 5939 5513 2% .9804 9612 9423 .9238 .9057 .8880 .8706 .8535 .8368 .8203 .8043 .7885 .7730 .7579 .7430 .7284 .7142 .7002 .6864 .6730 .6598 .6468 .6342 .6217 .6095 5976 .5859 5744 .5631 5521 5000 .4529 3% .9709 9426 9151 .8885 .8626 .8375 .8131 .7894 .7664 .7441 .7224 .7014 .6810 .6611 .6419 .6232 .6050 5874 .5703 5537 5375 5219 5067 .4919 .4776 .4637 .4502 .4371 .4243 4120 .3554 .3066 4% 9615 9246 .8890 .8548 .8219 .7903 .7599 .7307 .7026 .6756 .6496 .6246 .6006 5775 5553 5339 5134 .4936 .4746 .4564 4388 4220 .4057 3901 3751 3607 3468 3335 3207 3083 2534 2083 5% 6% 9524 .9434 9070 .8900 .8638 .8396 .8227 .7921 .7835 .7473 .7462 .7050 .7107 .6651 .6768 .6274 .6446 5919 .6139 5584 5847 5268 5568 .4970 .5303 .4688 .5051 .4423 .4810 .4173 .4581 3936 .4363 3714 4155 .3503 3957 .3305 .3769 3118 2942 2775 2618 2470 2330 2198 2074 1956 .1846 .1741 .1301 .0972 3589 3418 .3256 .3101 .2953 2812 2678 2551 .2429 .2314 .1813 1420 Note: For more detailed tables, see your reference booklet, the Business Math Handbook. 7% 9346 .8734 .8163 .7629 .7130 .6663 .6227 5820 5439 .5083 4751 .4440 .4150 .3878 3624 3387 .3166 2959 .2765 2584 .2415 .2257 .2109 .1971 .1842 1722 .1609 .1504 .1406 .1314 .0937 .0668 8% .9259 .8573 7938 .7350 .6806 .6302 5835 5403 5002 4632 .4289 3971 3677 3405 3152 2919 2703 2502 2317 2145 1987 .1839 .1703 1577 .1460 1352 1252 .1159 .1073 .0994 .0676 .0460 9% 10% 9174 .9091 .8417 .8264 7722 .7513 .7084 .6830 .6499 .6209 .5963 5645 5470 5132 5019 .4665 .4604 4241 .4224 3855 .3875 .3505 .3555 3186 3262 2897 2992 2633 2745 2394 2519 2176 2311 1978 .2120 1799 .1945 1635 .1784 1486 .1637 .1351 1502 1228 .1378 1117 .1264 .1015 .1160 0923 .1064 .0839 .0976 .0763 .0895 .0693 .0822 .0630 .0754 .0573 .0490 .0356 .0318 .0221 TABLE 13.2 Present value of an annuity of $1 2% 1% 2% 3% 5% 4% 0.9615 0.9950 0.9901 0.9804 0.9709 0.9524 1.9851 1.9416 1.9135 1.8861 1.8594 1.9704 2.9410 2.8839 2.9702 2.8286 2.7751 2.7232 3.9505 3.9020 3.8077 3.7171 3.6299 3.5459 4.9259 4.8534 4.7134 4.5797 4.4518 4.3295 5.8964 5.7955 5.6014 5.4172 5.2421 5.0757 6.8621 6.7282 6.4720 6.2303 6.0021 5.7864 7.8230 7.6517 7.3255 7.0197 6.7327 6.4632 8.7791 8.5660 8.1622 7.7861 7.4353 7.1078 9.7304 9.4713 8.9826 8.5302 8.1109 7.7217 10.6770 10.3676 9.7868 9.2526 8.7605 8.3064 11.6189 11.2551 10.5753 9.9540 9.3851 8.8632 12.5562 12.1337 11.3483 10.6350 9.9856 9.3936 13.4887 13.0037 12.1062 11.2961 10.5631 9.8986 14.4166 12.8492 11.9379 11.1184 10.3796 13.8650 15.3399 14.7179 13.5777 14.2918 12.5611 11.6523 10.8378 16.2586 15.5622 13.1661 12.1657 11.2741 17.1728 16.3983 14.9920 13.7535 12.6593 11.6896 18.0824 17.2260 15.6784 14.3238 13.1339 12.0853 18.9874 18.0455 16.3514 14.8775 13.5903 12.4622 23.4457 22.0231 19.5234 17.4131 15.6221 14.0939 27.7941 25.8077 22.3964 19.6004 17.2920 36.1723 32.8347 27.3554 23.1148 19.7928 15.3724 17.1591 15.0463 18.2559 15.7619 44.1428 39.1961 31.4236 25.7298 21.4822 Period 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 T NN 7% 0.9346 1.8080 6% 8% 9% 10% 11% 12% 0.9434 0.9259 0.9174 0.9091 0.9009 0.8929 1.8334 1.7833 1.7591 1.7355 1.7125 1.6901 2.6730 2.5313 2.4869 2.4437 2.4018 2.5771 3.3121 3.4651 3.2397 3.1699 3.1024 3.0373 4.2124 4.1002 3.9927 3.8897 3.7908 3.6959 3.6048 4.9173 4.7665 4.4859 4.3553 4.2305 4.1114 4.6229 5.2064 5.5824 5.3893 5.0330 4.8684 4.7122 6.2098 5.9713 5.7466 5.1461 5.5348 5.3349 5.9952 5.7590 5.5370 4.5638 4.9676 5.3282 6.8017 6.5152 6.2469 7.3601 7.0236 6.7101 6.4177 6.1446 5.8892 5.6502 7.8869 7.4987 5.9377 7.1390 7.5361 6.8052 6.4951 6.2065 7.1607 6.8137 6.4924 8.3838 7.9427 6.1944 8.8527 8.3576 6.4235 7.9038 8.2442 9.2950 8.7455 6.6282 9.7122 9.1079 8.5595 7.4869 7.1034 6.7499 7.7862 7.3667 6.9819 8.0607 7.6061 7.1909 6.8109 8.3126 8.5436 10.1059 9.4466 8.8514 7.8237 7.3792 6.9740 10.4773 9.7632 9.1216 8.0216 7.5488 7.1196 10.8276 10.0591 8.7556 8.2014 7.7016 7.2497 11.1581 10.3356 9.3719 9.6036 9.8181 11.4699 10.5940 8.9501 8.3649 7.8393 7.3658 9.1285 8.5136 7.9633 7.4694 12.7834 11.6536 10.6748 9.8226 9.0770 8.4217 7.8431 13.7648 12.4090 11.2578 10.2737 9.4269 8.6938 8.0552 8.9511 8.2438 13.3317 11.9246 10.7574 9.7790 13.8007 12.2335 10.9617 9.9148 9.0417 8.3045 2.6243 3.3872 llalalalalalalalalalalalalalWWN Mar M S