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Your client's daughter recently inherited some bonds (face value $50,000) from her father. She wants to cash the bonds in and place the proceeds into
Your client's daughter recently inherited some bonds (face value $50,000) from her father. She wants to cash the bonds in and place the proceeds into an account paying 7 percent compounded annually. The three percent annual coupon bonds mature on October 19th, 2035, and it is now October 19th, 2020. The bonds have a current yield-to-maturity of 5 percent. She wants to make three equal, annual withdrawals from the account, with the first withdrawal occurring today the third payment two years from today. Upon the third withdrawal, the account balance will be zero. What is the largest amount she could withdraw for three years, beginning today
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