Present and future values of $1 at 3% are presented below: FVA $1 PVA $1 FVAD $1 PVAD $1 PV $1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 2.91347 3.0909 2.82861 3.1836 4.1836 3.71710 4.3091 3.82861 5 1.15927 0.86261 6 1.19405 0.83748 7 1.22987 0.81309 5.3091 4.57971 5.4684 4.71710 6.4684 5.41719 6.6625 5.57971 7.6625 6.23028 7.8923 6.41719 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 8 9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 N FV $1 1 IN 2 34 1.09273 0.91514 1.12551 0.88849 Suppose you would like to have of $150,000 3-years from now. How much must you invest today in an account that earns 6% compounded semiannually? 9 Present and future values of $1 at 3% are presented below: N FV $1 PV $1 FVAD $1 PVAD $1 FVA $1 1.0000 PVA $1 0.97087 1 1.03000 0.97087 1.0300 1.00000 2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 5 6.41719 7.23028 8.01969 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 1.22987 0.81309 7.6625 6.23028 7.8923 1.26677 0.78941 8.8923 7.01969 9.1591 9 1.30477 0.76642 10.1591 7.78611 10.4639 10 1.34392 0.74409 11.4639 8.53020 11.8078 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 8.78611 678a Jimmy has $261,672 accumulated in a 401k plan. The fund is earning a low, but safe, 3% per year. The withdrawals will take place at the end of each year starting a year from now. How soon will the fund be exhausted if Jimmy withdraws $42,000 each year? Present and future values of $1 at 3% are presented below. FVAD $1 PVAD $1 1.0300 1.00000 2.0909 1.97087 N FV $1 PV $1 FVA $1 PVA $1 1 1.03000 0.97087 1.0000 0.97087 2 1.06090 0.94260 2.0300 1.91347 3 1.09273 0.91514 3.0909 2.82861 4 1.12551 0.88849 4.1836 3.71710 5 1.15927 0.86261 5.3091 4.57971 6 1.19405 0.83748 6.4684 7 1.22987 0.81309 7.6625 3.1836 2.91347 4.3091 3.82861 5.4684 4.71710 5.41719 6.6625 5.57971 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 8.01969 8.78611 9 1.30477 0.76642 10.1591 7.78611 10.4639 10 1.34392 0.74409 11.4639 8.53020 11.8078 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 Jose wants to cash in his winning lottery ticket. He can either receive six, $3,000 annual payments starting today, or he can receive one lump-sum payment today based on a 3% annual interest rate. What would be the lump-sum payment?