Author Question: How much must be invested today to make four annual withdrawals of $20,000 each for tuition payments ... (Read 38 times)

newyorker26 · **on:** Apr 25, 2021

Question 1

Find the present value of a 5-year annuity due if the annual payments are $600 and the interest rate is 11%. How much larger is the present value of the annuity due than the present value of the ordinary 5-year annuity?
◦ $243.93
◦ $204.76
◦ $279.22
◦ $261.32
◦ $227.45

Question 2

How much must be invested today to make four annual withdrawals of $20,000 each for tuition payments if you can earn 8% compounded annually on your investment and the first withdrawal will take place in one year? (Round to the nearest whole dollar.)
◦ $66,243
◦ $51,242
◦ $79,854
◦ $47,393
◦ $57,341

Alyson.hiatt@yahoo.com · **Reply #1 on:** Apr 25, 2021

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