How much money does Mandy need to deposit into her investment account today if she wishes...

How much money does Mandy need to deposit into her investment account today if she wishes to withdraw $80,000 a year for 20 years, starting at the end of the year? She expects to earn an average rate of return of 10 percent. $703,287.38 $681,085.10 $904,298.28 $805,298.40

Solutions

Expert Solution

Answer:$681,085.10

The amount she has to deposit can be determined by finding out the Present Value of annuity.

Excl can be used to serve this purpose.The function used =PV()

The number of years =20 the interest rate =10% The withdrawal amount(annual payments)=$80,000

The Formula used =PV(B3,B2,-B4) we get the amount to be deposited as $681,085.10

jeff jeffy answered 1 year ago

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