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Your grandmother just died and left you $47,500 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account?

Respuesta :

ammary456

Answer:

X = 13019.136

Explanation:

Use calculator to solve for X.

47,500 = X ( 1 - (1.065)^-4 ) / ( .065 / 1.065 )

set financial calculator to an annuity due setting

N = 4

I / Y = 6.5

PV = -47,500

FV = 0

CPT PMT

payments = 13019.136

The amount of withdrawal today should be $13,019.136

Given that,

  • Your grandmother just died and left you $47,500 in a trust fund that pays 6.5% interest.
  • You must spend the money on your college education, and you must withdraw the money in 4 equal installment

calculation:

47,500 = X ( 1 - (1.065)^-4 ) ÷ ( .065 ÷ 1.065 )

Or

N = 4

I / Y = 6.5

PV = -47,500

FV = 0

The excel formula is

=-PMT(RATE, NPER, PV, FV,TYPE)

Learn more about the interest rate here: https://brainly.com/question/4626564?referrer=searchResults