In: Finance
You want to have this amount at the end | 913 | |||||
Your money will be invested this number of years | 14 | |||||
You will withdraw this amount each year | 29 | |||||
The rate you will earn each year is this | 4.6% | |||||
How much should you start your investment with, today? | ||||||
A Between 500.00 and 820.00 | ||||||
B Between 820.00 and 870.00 | ||||||
C Between 870.00 and 920.00 | ||||||
D Between 920.00 and 1,200.00 | ||||||
Present value of required amount at end period=913*Present value of discounting factor(rate%,time period)
=913/1.046^14
=913*0.532790431
=486.437664
Present value of annual withdrawals=29*Present value of annuity factor(4.6%,14)
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=29[1-(1.046)^-14]/0.046
=29*10.1567298
=$294.545164
Hence current total value required=486.437664+294.545164
=780.98(Approx)
Hence the correct option is:
Between 500.00 and 820.00