What amount must be deposited in an account that earns 10% onJanuary 1, 2017...

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Accounting

What amount must be deposited in an account that earns 10% onJanuary 1, 2017 if an investor wants to withdraw $5,000 January 1of each year beginning on January 1, 2018 with the last withdrawalbeing made on January 1, 2021? What if the withdrawals take placeon December 31 of each year starting on December 31, 2017 untilDecember 31, 2020? What if withdrawals of $2,500 occur every sixmonths on June 30 and Dec 31 of each year starting on June 30, 2017until December 31, 2020?

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Solution 1 Amount to be withdrawn from 01012018 for 4 years 5000 Therefore required balance to be maintained in account on 01012018 Present value of annuity due for amount to be withdrawn discounted at 10 for 4 periods 5000 See Answer

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In: AccountingWhat amount must be deposited in an account that earns 10% onJanuary 1, 2017 if...What amount must be deposited in an account that earns 10% onJanuary 1, 2017 if an investor wants to withdraw $5,000 January 1of each year beginning on January 1, 2018 with the last withdrawalbeing made on January 1, 2021? What if the withdrawals take placeon December 31 of each year starting on December 31, 2017 untilDecember 31, 2020? What if withdrawals of $2,500 occur every sixmonths on June 30 and Dec 31 of each year starting on June 30, 2017until December 31, 2020?