Asked by Jamie Stuart on May 25, 2024
Verified
An investment guarantees to return a minimum of 9% compounded annually for 11 years. What is the total present value of 11 annual withdrawals of $3,000 each? Use Tables 23-2A and 23-2B or a calculator.
Compounded Annually
Interest calculated on the initial principal and the interest accumulated over the previous periods once every year.
Present Value
The amount needed to invest today to reach a stated future goal, given a certain rate of return.
Withdrawals
Amounts of money taken out of an account, which can reduce the balance in banking or investment contexts.
- Distinguish between the computations of future value and present value.
- Demonstrate the calculation of present value for a given return rate and withdrawal amount.
- Apply financial tables or calculators to achieve accurate financial planning and calculations.
Verified Answer
YG
Learning Objectives
- Distinguish between the computations of future value and present value.
- Demonstrate the calculation of present value for a given return rate and withdrawal amount.
- Apply financial tables or calculators to achieve accurate financial planning and calculations.