How much do you have to deposit today in order to allow 5 annual withdrawals, beginning at the...

Question:

How much do you have to deposit today in order to allow 5 annual withdrawals, beginning at the end of year 17, with a first withdrawal of $2430 and with subsequent withdrawals decreasing at the rate of 2% over the previous year's withdrawal? Assume an interest rate of 9% compounded annually.

Round your answer.

Answer and Explanation:

2700 is the deposit needed today.


Learn more about this topic:

Principal Amount: Definition & Formula

from Financial Accounting: Help and Review

Chapter 9 / Lesson 2
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