Question
Present value and future value computations. (Tables needed.) John Rich, an executive VP contemplating retirement on his sixty fifth birthday, decides to create a fund
Present value and future value computations. (Tables needed.) John Rich, an executive VP contemplating retirement on his sixty fifth birthday, decides to create a fund on a 6% basis that will enable him to withdraw $90,000 per year on July 31, beginning in 2022 and continuing through 2026. To develop this fund, Rich intends to make equal contributions on July 31 of each of the years 20172021. Instructions (a) Compute how much the balance of the fund must equal on July 31, 2021, in order for Rich to satisfy his objective. (b) Compute the amount of Rich's contributions to the fund.
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