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Al Vincent has decided to retire to Arizona in 11 years. What amount should Al invest today so that he will be able to withdraw
Al Vincent has decided to retire to Arizona in 11 years. What amount should Al invest today so that he will be able to withdraw $33,000 at the end of each year for 16 years after he retires? Assume he can invest the money at 6% interest compounded annually. (Use the Table 13.2 and Table 12.3.) (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% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 9174 8417 9852 9707 19563 .9422 .9434 8900 8396 .7921 .7473 .7050 .6651 9346 .8734 .8163 .7629 9091 .8264 .7513 .6830 6209 5645 .9283 7130 5132 .6274 .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 9145 9010 8877 8746 8617 8489 8364 8240 8119 .7999 .7880 .7764 .7649 .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 9709 9426 .9151 .8885 .8626 8375 .8131 7894 .7664 .7441 .7224 .7014 .6810 .6611 .6419 .6232 .6050 .6663 6227 .5820 .5439 .5083 4751 .4440 4150 3878 3624 3387 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 9524 9070 8638 .8227 7835 .7462 .7107 6768 .6446 .6139 .5847 .5568 .5303 15051 .4810 4581 .4363 .4155 .3957 3769 .3589 .3418 .3256 .3101 2953 2812 2678 ,2551 2429 2314 .1813 1420 9259 .8573 .7938 .7350 .6806 .6302 5835 .5403 .5002 .4632 4289 3971 -3677 -3405 .3152 2919 2703 2502 .2317 2145 .1987 1839 5874 .7722 .7084 6499 5963 .5470 5019 .4604 .4224 3875 3555 3262 2992 2745 .2519 .2311 2120 1945 .1784 .1637 1502 .1378 .1264 1160 .1064 .0976 0895 .0822 .0754 .0490 0 318 5919 5584 5268 4970 .4688 .4423 4173 -3936 .3714 3503 .3305 .3118 2942 2775 2618 2470 2330 2198 2074 .1956 .1846 .1741 .1301 .0972 .5703 .5537 .5375 .5219 .5067 .7536 .7425 7315 .7207 .7100 .6995 .6892 6790 .6690 .6591 6494 .6398 5939 5513 . 1703 .4665 4241 .3855 .3505 3186 2897 2633 .2394 .2176 .1978 .1799 .1635 1486 1351 .1228 1117 1015 0923 0839 0763 .0693 0630 .0573 0356 0221 3166 2959 .2765 .2584 2415 .2257 .2109 .1971 .1842 1722 1609 ..1504 .1 406 .1314 .0937 .0668 .4919 1577 1460 .1352 .1252 1159 .4776 4637 4502 4371 4243 4120 3554 3066 3207 1073 3083 .2534 2083 0994 .0676 0460 40 Note: For more detailed tables, see your booklet the Business Math Handbook TABLE 13.2 13.2 Present value of an annuity of $1 Period 2% 3% 4% 5% 6% 7% 8% 4 0.9804 1.9416 2.8839 3.8077 4.7134 5.6014 6.4720 7.3255 8.1622 8.9826 9.7868 10.5753 11.3483 12.1062 12.8492 13.5777 14.2918 14.9920 15.6784 16.3514 19.5234 22.3964 27.3554 31.4236 6 0.9709 1.9135 2.8286 3.7171 4.5797 5.4172 6.2303 7.0197 7.7861 8.5302 9.2526 9.9540 10.6350 1.2961 11.9379 12.5611 13.1661 13.7535 14.3238 14.8775 17.4131 19.6004 23.1148 25.7298 0.9615 0.9524 0.9434 0.9346 0.9259 1.8861 .8594 1.8334 1.8080 1.7833 2.7751 2.7232 2.6730 2.6243 2.5771 3 .6299 3.5459 3.4651 3.3872 3.3121 4.4518 4.3295 4.2124 4.1002 3.9927 5.2421 5.0757 4.9173 4.7665 4.6229 6.0021 5.7864 5.5824 5.3893 5.2064 6.7327 6.4632 6.2098 5.9713 5.7466 7.4353 7.1078 6.8017 6.5152 6.2469 8.11097 .7217 7.3601 7.0236 6.7101 8.7605 8.3064 7.88697.4987 7.1390 9.3851 8.8632 8.3838 7.9427 7.5361 9.9856 9.3936 8.8527 8.3576 7.9038 10.5631 9.8986 9.2950 8.7455 8.2442 1184 10.3796 9.71229.10798.5595 11.6523 10.8378 10.1059 9.4466 8.8514 12.1657 11.2741 10.4773 9.7632 9.1216 12.6593 11.6896 10.8276 10.0591 9.3719 13.1339 12.085311.1581 10.3356 9.6036 13.5903 12.4622 11.4699 10.5940 9.8181 15.6221 14.093912.7834 11.6536 10.6748 17.2920 15.3724 13.7648 12.4090 11.2578 19.7928 17.1591 15.0463 13.3317 11.9246 21.4822 18.2559 15.7619 13.8007 12.2335 9% 10% 11% 12% 0.9174 0.9091 0.90090.8929 1.7591 1.7355 1.7125 1.6901 2.5313 2.4869 2.4437 2.4018 3.2397 3.16993.1024 3.0373 3.8897 3.7908 3.69593.6048 4.4859 4.3553 4.2305 4.1114 5.0330 4.8684 4.7122 4.5638 5.5348 5.3349 5.1461 4.9676 5.9952 5.7590 5.5370 5.3282 .4177 6.1446 5.8892 6.80526.49516.2065 5.9377 7.1607 6.8137 6.4924 6.1944 7.48697.1034 6.7499 6.4235 7.7862 7.3667 6.9819 6.6282 8.0607 7.6061 7.19096.8109 8.3126 7.8237 7.3792 6.9740 8.5436 8.0216 7.5488 7.1196 8.7556 8.2014 7.7016 7.2497 8.9501 8.3649 7.8393 7.3658 9.1285 8.5136 7.96337.4694 9.8226 9.07708.4217 7.8431 10.2737 9.4269 8.6938 8.0552 10.7574 9.7790 8.9511 8.2438 10.9617 9.9148 90417 8.3045 13% 0.8850 1.6681 2.3612 2.9745 3.5172 3.9975 4.4226 4.7988 5.1317 5.4262 5.6869 5.9176 6.1218 6.3025 6.4624 6.6039 6.7291 6.8399 6.9380 7.0248 7.3300 7.4957 7.6344 7.6752Step by Step Solution
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