Jane inherited a lot of money and wants to deposit some of it today into an investment that earns a nominal interest rate of 5%

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Jane inherited a lot of money and wants to deposit some of it today into an investment that earns a nominal interest rate of 5% compounded semiannually. Starting immediately 10 years after the deposit, she wants to be able to withdraw $25,000 every six months for 5 years (11 withdrawals), at which point there will be no money remaining in the investment. How much money should Jane invest today?

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Understanding the Problem We need to determine the present value PV of a series of future withdrawalsThese withdrawals will occur semiannually for 5 yearsstarting 10 years from todayThe investment ear... View full answer

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