Question
Ben and Donna determine that upon retirement, they will need to withdraw $50,000 annually at the end of each year for the next thirty years.
Ben and Donna determine that upon retirement, they will need to withdraw $50,000 annually at the end of each year for the next thirty years. They know that they can earn 4% each year on their investment. What is the present value of this annuity? In other words, how much will Ben and Donna need in their retirement account (at the beginning of their retirement) to generate this future cash flow?
Step by Step Solution
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Step: 1
To find the present value of the annuity we can use the present value of an ordi...
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
