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b) Indicate which of the following formulas you used to solve this problem: 1) FV = S x F(i,n) 2) PV=Sx F(i,n) 3) FVA
b) Indicate which of the following formulas you used to solve this problem: 1) FV = S x F(i,n) 2) PV=Sx F(i,n) 3) FVA = 1 x F(i,n) 4) PVA = 1 x F(i,n) c) Show your calculations for your answers. Assume annual compounding and an 5% annual rate in the following two scenarios: 1) Assume Val will not retire for 5 years. Beginning with the end of year 6 she will make the first of 20 annual withdrawals from her retirement account in the amount of $50,000 (i.e., each year). How much must she have in her retirement account today in order to make these annual withdrawals as planned? 2) What must Val have in her account today if the scenario is the same as (1) above except each of the 20 annual withdrawals occur at the beginning of each year, starting with the beginning of year 6 ?
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