Present Value of an Annuity
Response to the following problem:
Samuel David wants to make five equal annual withdrawals of $8,000 from a fund that will earn interest at 10% compounded annually.
Required
How much would David have to invest on:
1. January 1, 2010 if the first withdrawal is made on January 1, 2011?
2. January 1, 2010 if the first withdrawal is made on January 1, 2010?